App Economy Insights
📺 US TV Time October 2025:

Streaming 45.7% (+5.2pp Y/Y).

• YouTube 12.9% (+2.3pp Y/Y).
• Netflix 8.0% (+0.5pp Y/Y).
• Disney apps 4.8% (flat Y/Y).
• Prime Video 3.8% (+0.3pp Y/Y).
• Roku Channel 2.8% (+1.0pp Y/Y).
$GOOG $NFLX $AMZN $DIS $ROKU
Source: Nielsen https://t.co/v3buwSkAgG
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EndGame Macro
The Moment the Credit Cycle and the Debt Wall Collided

That red bar really does say it all. You don’t jump from paying $20–30 billion every October to paying more than $100 billion unless the whole foundation has shifted. And it has. For over a decade, the U.S. leaned on short term debt issued at or near zero, and the cost never showed up because the rate environment made it painless. But once the Fed pushed rates high and only recently cut them to the current 3.75%–4.00% range, with an effective rate around 3.88% all that cheap debt began rolling into today’s pricing. October is a heavy coupon month, so the spike shows up fast. It’s not a one off. It’s the beginning of a more expensive era.

And it’s arriving at the worst possible moment. This isn’t landing on a strong economy. It’s hitting right as the credit cycle is softening. The interest chart isn’t separate from the economy. It’s part of the same story.

The Credit Cycle and the Debt Wall Are Converging

Zoom out and the recession pattern is obvious. Subprime delinquencies are back at stress levels. Office loans have never looked worse. Specialty lenders are disappearing. Banks are tightening across business and consumer credit. Corporate bankruptcies are the highest in fifteen years. Oil sliding under $60 signals weakening demand. And the bond market is flashing warnings everywhere.

These aren’t random signals. This is the chain you get when a tightening cycle goes too far. And now the blowout in interest expense is simply the government’s version of the same strain hitting households and businesses.

The debt wall makes the picture even sharper. Total debt is near $38 trillion. Roughly $11 trillion rolls within the next year. More than 20% of all Treasuries mature in fiscal 2025. By 2028, around 61% of the entire debt stock will have turned over. Over four years, about $28 trillion must be refinanced. It’s the largest repricing wave in modern history and it’s colliding with a weakening economy.

In a strong cycle, maybe higher rates were tolerable. But with delinquencies rising, credit tightening, layoffs picking up, and demand cooling, revenues will fall just as refinancing costs jump. That squeezes the government at the exact moment households and businesses are strained too.

Why This Speeds Up the Need for Cuts

This is why the current downturn accelerates the path to rate cuts. Once unemployment drifts toward the high 5% or 6%, the Fed loses the option of a gentle glide path. They get pushed into a real cutting cycle, something in the 200–300 basis point range, maybe faster if funding stress builds.

And you can already see the groundwork with the two 25 bp cuts in September and October, QT ending on December 1, and a new schedule of Treasury purchases starting December 11. Even with internal disagreement about a December cut, analysts expect another 25 bps.

Cuts will help the interest bill, but they come with tradeoffs like weaker revenues, wider deficits, and more reliance on financial repression. The challenge shifts from rates are too high to growth is too weak.

The Bottom Line

A long term fiscal concern has become a right now macro problem. The interest chart is the public sector version of the same stress building across credit, labor, lending, and corporate balance sheets. Both the private economy and the federal balance sheet are signaling the same thing: the current rate regime no longer fits the reality on the ground.

We’re already past the point where 5% policy rates make sense. The only question left is whether the Fed moves first or whether the economy forces them.

Either way, that red bar isn’t warning of trouble. It’s showing where the trouble started.

folks.... https://t.co/sQQ84HC6vw - zerohedge
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EndGame Macro
RT @CoffeeandaMike: FULL SHOW: https://t.co/xuw73S4tuI
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AkhenOsiris
Why does he say all this stuff when sports betting is like 90%+ of the volume on his platform?

Most people don’t know this, but 100 years ago prediction markets were a major part of American finance. These weren’t fringe experiments. Wall Street ran massive, organized election markets that exceeded daily stock market volumes. Newspapers covered them constantly and treated them as the country’s main forecasting tool.

And today, it seems we have come full circle with Bloomberg reporting: “Prediction markets will be where information is aggregated and prices set, with the New York Stock Exchange and its ilk relegated to processing orders. To some extent this has already happened.”

Kalshi started from the idea that every major asset class has a financial market, stocks, credit, commodities, FX, but there wasn’t one for simple questions about the future that carry economic and social weight. If we could build that market, it could become one of the largest.

Stock traders already use Kalshi’s Tesla markets because it lets them isolate the drivers of a company and price each one cleanly, such as “Tesla deliveries this quarter” or “When will Tesla launch unsupervised FSD?”. Prediction markets let you disaggregate complex outcomes into probability-weighted components and build better financial models.

But that’s just the starting point. Prediction markets are a superset of every other market: weather risk, macro releases, elections, crypto, sports, geopolitics. They’re structurally uncapped.

All of finance will ultimately flow down from a single canonical source of truth: liquid markets that price the future directly. Prediction markets. - Tarek Mansour
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AkhenOsiris
RT @obsidiancap1: 25% return in 4 wks since goog’s VP of infra Amin Vahdat went on pod banging drum about demand and TPU utilization…

How can ppl still think 1) there isn’t alpha in mega caps, and 2) all info is priced in?

$GOOG AI/infra VP went on pod right before earnings and publicly disclosed they are seeing “tremendous” demand and 100% utilization rates on TPUs

+8% AH on a $3 trillion mkt cap

(Yes I know non-cloud search beat too) - obsidian capital
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $META 🧘🏽‍♂️

•NTM P/E Ratio: 19.89x
•3-Year Mean: 22.75x

•NTM FCF Yield: 1.50%
•3-Year Mean: 3.20%

As you can see, $META appears to be trading below fair value on an earnings multiple

Going forward, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share🧠***

Before we get into valuation, let’s take a look at why $META is a quality business

BALANCE SHEET✅
•Cash & Equivalents: $44.45B
•Long-Term Debt: $28.34B

$META has an excellent balance sheet, an AA- S&P Credit Rating & 112x FFO Interest Coverage Ratio

RETURN ON CAPITAL✅
•2021: 33.7%
•2022: 22.0%
•2023: 25.7%
•2024: 29.4%
•LTM: 32.9%

RETURN ON EQUITY✅
•2021: 31.1%
•2022: 18.5%
•2023: 28.0%
•2024: 37.1%
•LTM: 32.6%

$META has great return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2020: $85.97B
•2025E: $199.46B
•CAGR: 18.33%

FREE CASH FLOW✅*
•2020: $23.58B
•2025E: $41.47B
•CAGR: 11.95%

•2028E: $74B*

NORMALIZED EPS✅
•2020: $10.09
•2025E: $25.99
•CAGR: 20.83%

SHARE BUYBACKS✅
•2019 Shares Outstanding: 2.88B
•LTM Shares Outstanding: 2.59B

By reducing its shares outstanding ~10%, $META increased its EPS by ~11% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 82.0%
•LTM Operating Margins: 42.6%
•LTM Net Income Margins: 30.9%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~14% MORE in EPS & ~53% LESS in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $META has to grow earnings at a 9.95% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2026 - 2028 EPS growth over the next few years to be slightly less than the (9.95%) required growth rate:

2025E: $25.99 (9% YoY) *FY Dec

2026E: $30.31 (17% YoY)
2027E: $33.55 (11% YoY)
2028E: $35.02 (4% YoY)

$META has a decent track record of meeting analyst estimates ~2 years out, so let’s assume $META ends 2028 with $35.02 in EPS & see its CAGR potential assuming different multiples

24x P/E: $840💵 … ~12.2% CAGR

23x P/E: $805💵 … ~10.6% CAGR

22x P/E: $770💵 … ~9.1% CAGR

21x P/E: $735💵 … ~7.5% CAGR

20x P/E: $700💵 … ~5.8% CAGR

As you can see, $META appears to have double-digit CAGR potential if we assume >23x earnings, a multiple near its 3-year mean and a multiple that’s potentially justified given its growth rate, balance sheet, visionary leadership & AI-related investments

As I’ve mentioned before: “… the increased investment in future growth and necessary Al development, which has the potential to lead to better growth prospects, should be viewed with a bullish tone rather than a bearish one” — (which can lead to a sustainable re-rating over the next few years)

Today at $594💵 $META appears to be slightly undervalued, those buying today have a small margin of safety and will not need to rely on margin expansion

I consider $META a great buy ~$535💵, offering ~11% CAGR assuming a conservative 21x 2028 EPS est

#stocks #investing
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️

𝐓𝐡𝐢𝐬 𝐜𝐨𝐧𝐭𝐞𝐧𝐭 𝐢𝐬 𝐩𝐫𝐨𝐯𝐢𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐜𝐨𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐞 𝐢𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞, 𝐚𝐧 𝐨𝐟𝐟𝐞𝐫, 𝐨𝐫 𝐚 𝐬𝐨𝐥𝐢𝐜𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐭𝐨 𝐛𝐮𝐲 𝐨𝐫 𝐬𝐞𝐥𝐥 𝐚𝐧𝐲 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐲.

𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐨𝐥𝐝 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝. 𝐀𝐧𝐲 𝐨𝐩𝐢𝐧𝐢𝐨𝐧𝐬 𝐞𝐱𝐩𝐫𝐞𝐬𝐬𝐞𝐝 𝐚𝐫𝐞 𝐚𝐬 𝐨𝐟 𝐭𝐡𝐞 𝐝𝐚𝐭𝐞 𝐨𝐟 𝐩𝐮𝐛𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐚𝐧𝐝 𝐬𝐮𝐛𝐣𝐞𝐜𝐭 𝐭𝐨 𝐜𝐡𝐚𝐧𝐠𝐞 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐧𝐨𝐭𝐢𝐜𝐞.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲 𝐨𝐫 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫[...]

𝐦𝐚𝐧𝐜𝐞 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.
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EndGame Macro
Large Banks Freed, Community Banks Cushioned: The Capital Shift That Signals What’s Coming

Over the last stretch, regulators quietly rewired both ends of the banking system. At the top, they loosened the enhanced leverage rules for GSIBs, lowering the eSLR buffer and trimming TLAC and long term debt requirements. At the bottom, they lowered the community bank leverage ratio (CBLR) from 9% to 8% and doubled the grace period from two quarters to four, while allowing up to eight quarters of grace in any 5 year window.

These moves look technical, but together they tell a much bigger story: the system is being given more room to bend before the stress arrives.

Large Banks: Making Room for a Heavy Treasury Cycle

The big bank changes matter most for liquidity. The old eSLR had become a frequently binding constraint, limiting how much Treasuries, repo, and reserves GSIBs could hold. Regulators openly acknowledged this in their memo. After the recalibration, the economic tables show something striking: roughly $1.1T of extra room at bank subsidiaries for reserves and Treasuries, and about $2.1T at broker dealers for Treasuries, assuming hedging.

That’s almost $3T of potential balance sheet capacity created by design. Regulators don’t usually publish numbers like that unless they want to send a message. And the message is simple…“When Treasury issuance spikes or liquidity thins, we need the biggest banks free to step in.”

Overlay that with two rate cuts already behind us, QT ending December 1, new Treasury purchases starting December 11, and the fed funds effective rate sitting around 3.88% and you see monetary and regulatory easing moving in the same direction. They’re clearing obstacles in advance, not after the fact.

Community Banks: Extra Oxygen Before Losses Hit

The community bank rule is the other half of the picture. CRE is the Achilles’ heel here with falling property values, higher refinancing costs, and concentrated loan books. Regulators know small banks can’t raise capital quickly, especially during a downturn. So they lowered the CBLR to 8%, the statutory floor and doubled the time banks can remain in the framework if they fall below the threshold.

According to the proposal, this brings roughly 475 more banks into eligibility and opens about $64B of lending capacity for those already in the framework.

It’s not subtle, they’re letting small banks run with more leverage and more time so a wave of CRE problems doesn’t force them into immediate deleveraging or credit cuts.

The four quarter grace period and the ability to use it for up to eight quarters over five years is the loudest tell. You don’t build that unless you expect a multi year grind.

What’s Unusual And What It Signals

A few things stand out…

1. Capital relief for both GSIBs and community banks at the same time, that’s rare. Post 2008 reforms tightened cushions late in cycles; they didn’t loosen them.

2.Publishing multi trillion dollar capacity estimates, regulators almost never quantify balance sheet expansion this explicitly.

3.Dropping the CBLR to the COVID emergency level…permanently, that alone tells you where they think the cycle is heading.

4.Longer grace windows for small banks, a quiet admission that stress won’t resolve in two quarters.

These are not the moves of regulators expecting a smooth landing.

My Read And What This Foreshadows

Taken together, this is coordinated pre-crisis preparation…

•Large banks are being set up as shock absorbers for the Treasury market and the Fed’s balance sheet pivot.

•Community banks are being given time, room, and simplified rules to keep lending even as CRE losses rise.

They’re not saying the economy is breaking. They’re adjusting the architecture like they expect real stress with slower growth, higher defaults, and a refinancing wave the system can’t handle without more flexibility.

This is the scaffolding you build when you want the system to bend, not snap. tweet

EndGame Macro
America’s Credit Rejection Rate Just Hit a Record. Here’s Why It Matters

This is the credit system quietly tightening around the edges. The NY Fed’s rejection rate for credit applicants has floated between the mid teens and low 20s for more than a decade. Even the tighter years never really broke past the 23% area. Now we’re pushing toward 25%, the highest in the entire series.

And this isn’t people afraid to apply. This is the group that did apply…for auto loans, credit cards, refis, limit increases, mortgages and got turned down. One in four being rejected is the kind of level you usually see late in a credit cycle, when lenders stop trying to grow and start trying to protect themselves.

Historically, when rejection rates rise like this and stay elevated, it’s a sign that banks are bracing for the next phase, in a quiet, defensive posture. It’s the same pattern you saw leading into the early 90s recession, the early 2000s slowdown, and again in 2007 before things really cracked.

Why It’s Happening Now

Delinquencies are rising almost everywhere just look at subprime autos, credit cards, student loans. Recent grads are struggling with both unemployment and eroding credit scores. Households have been running hotter and thinner for two full years, leaning on cards and long term car loans to fill the gap while rates climbed. And lenders aren’t blind to this; they’re seeing the deterioration show up in their own books.

There’s also the macro backdrop. Funding costs are still elevated. Commercial real estate is sitting on its own maturity wall. Regulations for both big and small banks were just loosened which, ironically, is a sign regulators are preparing for stress, not celebrating strength. When banks read that signal, they don’t accelerate lending, they get choosier.

Put yourself in the banker’s mindset…this isn’t the moment to take on a wave of borderline borrowers. So standards tighten, thresholds shift, and the marginal applicant suddenly falls on the wrong side of the line.

What It’s Foreshadowing

A rejection rate hitting a new high isn’t the end of the world, but it does tell you how the next stretch of this cycle is likely to feel.

People who’ve been relying on credit to smooth over rising costs are going to hit a wall sooner. The group already struggling with delinquencies won’t have escape valves like refinancing or higher limits. And as that happens, the pressure on household cash flows will feed back into consumption and debt service.

This is the part of the cycle that doesn’t announce itself with a crash, it shows up slowly, in charts like this one. A quarter of applicants being denied is a sign that the system is already shifting from expansion to defense.
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