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EndGame Macro
The Calm Before the Credit Cycle Turns
On the surface, spreads this tight look like a clean endorsement of corporate balance sheets. Investors are basically saying, “We’re not worried, these companies look fine.” And if you only looked at the spread chart, you might think the credit market is sitting in a sweet spot with no real stress in sight. But once you layer in what’s happening across the Treasury curve, the corporate curve, the refinancing schedule ahead, and the growing risk of unemployment drifting higher, the picture becomes a lot less simple.
The Curve Is Whispering a Different Story
Treasury data through 2025 makes the shift pretty clear. The front end has eased a lot, 6 month bills that were above 5% last year are now sitting closer to 3.8–4.0%. You can see it right in the daily Treasury data. But the long end hasn’t followed them down. 10 year yields are still hovering a little above 4%, and the 30 year is hanging out closer to 4.7%. It’s a curve that’s no longer inverted, but it’s not easing across the board either, it’s tilting.
Corporate yields show the same pattern, just amplified. August 2025 corporate spot rates tell the story cleanly: short dated corporate yields have fallen almost a full percentage point from last year, but long dated yields have gone the other direction. 30 year corporates are now near 6%, and anything past that like the 80, 90, 100 year marks sits comfortably above 6.2%. So even as spreads grind tighter, the all in cost of long term borrowing has gotten more expensive, not less.
That’s the part of the story spreads alone don’t tell you: the credit premium is tiny, but the term premium isn’t going anywhere.
The Maturity Wall And Why Unemployment Matters
Now place all of that next to the refinancing calendar. Between the end of 2025 and the end of 2026, companies have nearly $2 trillion in debt to roll, roughly a 1 trillion of it in investment grade alone, with high yield and CRE not far behind. And yes, they can refinance, the demand is there, which is exactly why spreads are this tight but they’re refinancing into a curve where the cheap money is at the front and the expensive money sits out where they’d normally issue.
And this is where rising unemployment becomes a real risk. If job losses begin to drift higher, even gradually, it feeds into slower demand, weaker revenue, and thinner margins. Companies don’t fall into distress overnight, but the earnings cushion that makes refinancing easy begins to erode. Credit spreads don’t stay serene when labor softens, they finally start paying attention.
Tight spreads don’t erase the cost of debt. They just make today’s deals look painless.
My Read on the Whole Picture
To me, this feels like one of those moments where the market’s calm is real, but it’s also fragile. Investment grade credit looks solid in the near term; balance sheets have breathing room, and refinancing isn’t a crisis. But the pricing underneath it, the shape of the curve, the higher long end cost of capital, the mountain of maturities ahead, and the early signs of labor softening doesn’t look like early cycle confidence. It looks more like late cycle complacency.
So yes, companies will likely get through this window. But investors buying at these levels aren’t being paid much if something shifts. Most of the yield today isn’t about credit risk at all, it’s about duration and supply. And when growth slows more visibly, spreads don’t have to blow out for people to feel it. They just have to move from ultra tight back to something normal.
That’s the part the spread chart leaves out and it’s the part that matters most.
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The Calm Before the Credit Cycle Turns
On the surface, spreads this tight look like a clean endorsement of corporate balance sheets. Investors are basically saying, “We’re not worried, these companies look fine.” And if you only looked at the spread chart, you might think the credit market is sitting in a sweet spot with no real stress in sight. But once you layer in what’s happening across the Treasury curve, the corporate curve, the refinancing schedule ahead, and the growing risk of unemployment drifting higher, the picture becomes a lot less simple.
The Curve Is Whispering a Different Story
Treasury data through 2025 makes the shift pretty clear. The front end has eased a lot, 6 month bills that were above 5% last year are now sitting closer to 3.8–4.0%. You can see it right in the daily Treasury data. But the long end hasn’t followed them down. 10 year yields are still hovering a little above 4%, and the 30 year is hanging out closer to 4.7%. It’s a curve that’s no longer inverted, but it’s not easing across the board either, it’s tilting.
Corporate yields show the same pattern, just amplified. August 2025 corporate spot rates tell the story cleanly: short dated corporate yields have fallen almost a full percentage point from last year, but long dated yields have gone the other direction. 30 year corporates are now near 6%, and anything past that like the 80, 90, 100 year marks sits comfortably above 6.2%. So even as spreads grind tighter, the all in cost of long term borrowing has gotten more expensive, not less.
That’s the part of the story spreads alone don’t tell you: the credit premium is tiny, but the term premium isn’t going anywhere.
The Maturity Wall And Why Unemployment Matters
Now place all of that next to the refinancing calendar. Between the end of 2025 and the end of 2026, companies have nearly $2 trillion in debt to roll, roughly a 1 trillion of it in investment grade alone, with high yield and CRE not far behind. And yes, they can refinance, the demand is there, which is exactly why spreads are this tight but they’re refinancing into a curve where the cheap money is at the front and the expensive money sits out where they’d normally issue.
And this is where rising unemployment becomes a real risk. If job losses begin to drift higher, even gradually, it feeds into slower demand, weaker revenue, and thinner margins. Companies don’t fall into distress overnight, but the earnings cushion that makes refinancing easy begins to erode. Credit spreads don’t stay serene when labor softens, they finally start paying attention.
Tight spreads don’t erase the cost of debt. They just make today’s deals look painless.
My Read on the Whole Picture
To me, this feels like one of those moments where the market’s calm is real, but it’s also fragile. Investment grade credit looks solid in the near term; balance sheets have breathing room, and refinancing isn’t a crisis. But the pricing underneath it, the shape of the curve, the higher long end cost of capital, the mountain of maturities ahead, and the early signs of labor softening doesn’t look like early cycle confidence. It looks more like late cycle complacency.
So yes, companies will likely get through this window. But investors buying at these levels aren’t being paid much if something shifts. Most of the yield today isn’t about credit risk at all, it’s about duration and supply. And when growth slows more visibly, spreads don’t have to blow out for people to feel it. They just have to move from ultra tight back to something normal.
That’s the part the spread chart leaves out and it’s the part that matters most.
Corporate bond spreads tighten to their narrowest in decades, per FT: https://t.co/2XaZzb8wMI tweet
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EndGame Macro
MSTR Isn’t Trading Cheap It’s Trading Honestly.
This chart is basically a mood ring for how the market feels about MicroStrategy as a Bitcoin proxy. You’ve got the red bars for MSTR’s market cap, the orange bars for the value of their Bitcoin, and the black line showing the ratio between the two, how much of a premium or discount investors are willing to put on the stock compared to the BTC it holds.
Early on, the market paid way above the value of the coins, more than 3x at one point. That wasn’t about fundamentals; that was the story. MSTR was one of the only ways to get outsized BTC exposure through a regular brokerage account, so people treated it like a high beta Bitcoin bet with a cult leader attached.
As time passed, that enthusiasm faded. The ratio slid, even dipped below 1.0x in 2022, meaning the stock was worth less than the BTC it owned. Then sentiment swung again during the next run, and the ratio pushed above 2x.
And now it’s back below 1.0x roughly 0.97x which means the stock trades at a discount to its Bitcoin holdings again. The excitement premium has evaporated.
What That Discount Really Implies
A sub 1.0x ratio tells you the market doesn’t see this as a clean Bitcoin vehicle. It sees the extra baggage…
•There’s debt on the balance sheet and real costs attached to all that BTC.
•Shareholders carry governance and “Saylor risk” you’re not just buying the coins, you’re buying his decisions.
•The software business still exists and adds noise.
•And, crucially, investors now have easier, cleaner, low fee ways to own BTC.
When ETFs exist, and access is simple, the old pay a premium for exposure logic disappears. The wrapper matters now, not just the asset inside it.
My Straightforward Read
People look at this discount and wonder if it’s a buying opportunity or a warning sign. To me, the most grounded interpretation is that this is a regime shift, not a temporary mispricing. MSTR isn’t the only door into Bitcoin anymore, so the market doesn’t feel the need to reward it with a premium. And once that psychology breaks, the stock starts behaving more like a closed end fund…it can trade above or below the value of its assets depending on sentiment, not math.
It could flip back to a premium in a full on mania, the chart shows it’s happened before. But that doesn’t mean it should, or that it will happen just because there’s a gap today.
The market is telling you something simple…You’re not buying cheap BTC.
You’re buying BTC plus leverage, plus liabilities, plus a corporate structure, plus narrative risk.
The discount reflects all of that.
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MSTR Isn’t Trading Cheap It’s Trading Honestly.
This chart is basically a mood ring for how the market feels about MicroStrategy as a Bitcoin proxy. You’ve got the red bars for MSTR’s market cap, the orange bars for the value of their Bitcoin, and the black line showing the ratio between the two, how much of a premium or discount investors are willing to put on the stock compared to the BTC it holds.
Early on, the market paid way above the value of the coins, more than 3x at one point. That wasn’t about fundamentals; that was the story. MSTR was one of the only ways to get outsized BTC exposure through a regular brokerage account, so people treated it like a high beta Bitcoin bet with a cult leader attached.
As time passed, that enthusiasm faded. The ratio slid, even dipped below 1.0x in 2022, meaning the stock was worth less than the BTC it owned. Then sentiment swung again during the next run, and the ratio pushed above 2x.
And now it’s back below 1.0x roughly 0.97x which means the stock trades at a discount to its Bitcoin holdings again. The excitement premium has evaporated.
What That Discount Really Implies
A sub 1.0x ratio tells you the market doesn’t see this as a clean Bitcoin vehicle. It sees the extra baggage…
•There’s debt on the balance sheet and real costs attached to all that BTC.
•Shareholders carry governance and “Saylor risk” you’re not just buying the coins, you’re buying his decisions.
•The software business still exists and adds noise.
•And, crucially, investors now have easier, cleaner, low fee ways to own BTC.
When ETFs exist, and access is simple, the old pay a premium for exposure logic disappears. The wrapper matters now, not just the asset inside it.
My Straightforward Read
People look at this discount and wonder if it’s a buying opportunity or a warning sign. To me, the most grounded interpretation is that this is a regime shift, not a temporary mispricing. MSTR isn’t the only door into Bitcoin anymore, so the market doesn’t feel the need to reward it with a premium. And once that psychology breaks, the stock starts behaving more like a closed end fund…it can trade above or below the value of its assets depending on sentiment, not math.
It could flip back to a premium in a full on mania, the chart shows it’s happened before. But that doesn’t mean it should, or that it will happen just because there’s a gap today.
The market is telling you something simple…You’re not buying cheap BTC.
You’re buying BTC plus leverage, plus liabilities, plus a corporate structure, plus narrative risk.
The discount reflects all of that.
$MSTR market cap is less than the value of its BTC holdings.
Do what you want with this information. https://t.co/OyQPSTgcFo tweet
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EndGame Macro
A Quiet Exit From Services Stocks Is Telling a Loud Macro Story
This is the unwinding of a trade that worked incredibly well for three years straight. From 2021 through mid 2024, funds kept piling into consumer services names…travel, leisure, dining because the post Covid boom made them look bulletproof. That overweight kept climbing, peaking near the highest levels of the entire decade.
Now the line is collapsing. Funds aren’t necessarily turning bearish on the whole sector; they’re simply rushing out of a crowded long at the same time. When positioning gets this heavy and then reverses this sharply, it almost always reflects a shift in how managers see the underlying economy, not just the sector.
The Macro Message Behind the Move
The deeper read is pretty simple…the consumer is losing altitude. Not in a dramatic, crisis like way, more in the steady, grinding way that shows up before unemployment rises and before earnings revisions start rolling in. Travel demand is cooling, dining traffic is softer, and households are being more selective. At the same time, these businesses still face high labor costs, elevated rents, and expensive financing. That combination makes the sector extremely sensitive to even small changes in demand.
Hedge funds know this. They’re looking at slower spending, softer labor data, and a yield curve that still hasn’t fully eased on the long end. And they’re asking themselves a practical question…“Why stay overloaded in a cyclical sector right as the economy is losing steam?” What we’re seeing on the chart is their answer…
My View
To me, this is a cycle signal. The reopening and high spend phase is behind us, the consumer is no longer overpowered by savings and stimulus, and investors are starting to reposition for a slower backdrop. If economic data continues to cool, this rotation will look smart. If the consumer finds new life, it may look premature.
But based on the way this curve has turned and how quickly, it feels more like funds are stepping out ahead of a shift rather than chasing a headline. Sometimes the flow tells the story before the data does. This looks like one of those moments.
tweet
A Quiet Exit From Services Stocks Is Telling a Loud Macro Story
This is the unwinding of a trade that worked incredibly well for three years straight. From 2021 through mid 2024, funds kept piling into consumer services names…travel, leisure, dining because the post Covid boom made them look bulletproof. That overweight kept climbing, peaking near the highest levels of the entire decade.
Now the line is collapsing. Funds aren’t necessarily turning bearish on the whole sector; they’re simply rushing out of a crowded long at the same time. When positioning gets this heavy and then reverses this sharply, it almost always reflects a shift in how managers see the underlying economy, not just the sector.
The Macro Message Behind the Move
The deeper read is pretty simple…the consumer is losing altitude. Not in a dramatic, crisis like way, more in the steady, grinding way that shows up before unemployment rises and before earnings revisions start rolling in. Travel demand is cooling, dining traffic is softer, and households are being more selective. At the same time, these businesses still face high labor costs, elevated rents, and expensive financing. That combination makes the sector extremely sensitive to even small changes in demand.
Hedge funds know this. They’re looking at slower spending, softer labor data, and a yield curve that still hasn’t fully eased on the long end. And they’re asking themselves a practical question…“Why stay overloaded in a cyclical sector right as the economy is losing steam?” What we’re seeing on the chart is their answer…
My View
To me, this is a cycle signal. The reopening and high spend phase is behind us, the consumer is no longer overpowered by savings and stimulus, and investors are starting to reposition for a slower backdrop. If economic data continues to cool, this rotation will look smart. If the consumer finds new life, it may look premature.
But based on the way this curve has turned and how quickly, it feels more like funds are stepping out ahead of a shift rather than chasing a headline. Sometimes the flow tells the story before the data does. This looks like one of those moments.
Hedge Funds are dumping consumer services stocks (hotels, restaurants) at the fastest pace in AT LEAST 5 years 🚨🚨 https://t.co/cSEjrbXf1T tweet
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EndGame Macro
This is the Fed’s polite way of saying, “There’s a lot more leverage under the hood than people realize.”
What stands out is how fast the prime brokerage and repo lines have climbed over the last few years. Prime broker financing tells you equity books are running bigger and more levered. Repo financing tells you fixed income trades, especially Treasury arbitrage have ballooned. Put together, it shows a market leaning heavily on borrowed money at a time when both volatility and issuance have been rising.
And here’s the part that matters: this kind of leverage works beautifully when everything is calm. It juices returns, smooths spreads, and makes the whole system look more liquid than it really is. But it cuts the other way when conditions shift. If funding tightens, haircuts rise, or volatility jumps, these same trades unwind quickly…not because sentiment changes, but because margin calls force them to.
So the chart is a reminder of how modern markets function…hedge funds provide liquidity, but they also borrow a lot to do it. As long as financing stays easy, this structure holds. When it wobbles, this is exactly where cracks tend to show up first.
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This is the Fed’s polite way of saying, “There’s a lot more leverage under the hood than people realize.”
What stands out is how fast the prime brokerage and repo lines have climbed over the last few years. Prime broker financing tells you equity books are running bigger and more levered. Repo financing tells you fixed income trades, especially Treasury arbitrage have ballooned. Put together, it shows a market leaning heavily on borrowed money at a time when both volatility and issuance have been rising.
And here’s the part that matters: this kind of leverage works beautifully when everything is calm. It juices returns, smooths spreads, and makes the whole system look more liquid than it really is. But it cuts the other way when conditions shift. If funding tightens, haircuts rise, or volatility jumps, these same trades unwind quickly…not because sentiment changes, but because margin calls force them to.
So the chart is a reminder of how modern markets function…hedge funds provide liquidity, but they also borrow a lot to do it. As long as financing stays easy, this structure holds. When it wobbles, this is exactly where cracks tend to show up first.
Hedge funds often augment their investment positions using leverage. The leverage sources can be divided into three categories: prime brokerage, repo, and other secured borrowing. Prime brokerage and repo borrowing have increased rapidly over the past few years, as shown in this chart. Learn more: https://t.co/ep6ItQTBlh tweet
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EndGame Macro
https://t.co/xAJ2xvWTPi
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https://t.co/xAJ2xvWTPi
*FED'S HAMMACK SAYS WORRIED ABOUT THE LABOR MARKET: MARKETWATCH
turning dovish tweet
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EndGame Macro
RT @APompliano: From the Desk of Anthony Pompliano
0:00 Home Affordability Is Impacting Everything
6:30 Warren Buffett Shares His Final Notes
8:32 Milton Friedman’s Recipe For Economic Policy Success
Enjoy! https://t.co/ex3Sqc9EZ4
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RT @APompliano: From the Desk of Anthony Pompliano
0:00 Home Affordability Is Impacting Everything
6:30 Warren Buffett Shares His Final Notes
8:32 Milton Friedman’s Recipe For Economic Policy Success
Enjoy! https://t.co/ex3Sqc9EZ4
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EndGame Macro
RT @GeorgeGammon: Bitcoin And MSTR Are Crashing (What You Need To Know) https://t.co/457R0Agkdb
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RT @GeorgeGammon: Bitcoin And MSTR Are Crashing (What You Need To Know) https://t.co/457R0Agkdb
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X (formerly Twitter)
George Gammon
Bitcoin And MSTR Are Crashing (What You Need To Know)