Offshore
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memenodes
When someone says they are not unemployed, but an early investor for altseason
https://t.co/FUjJAyBujJ
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When someone says they are not unemployed, but an early investor for altseason
https://t.co/FUjJAyBujJ
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Offshore
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memenodes
when your last $420 get rugged but at least the stress is gone https://t.co/05XZ1Y3Z7o
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when your last $420 get rugged but at least the stress is gone https://t.co/05XZ1Y3Z7o
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Offshore
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memenodes
When you're having a good day but someone your age says they just bought a house https://t.co/N5iprIfnwP
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When you're having a good day but someone your age says they just bought a house https://t.co/N5iprIfnwP
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EndGame Macro
Plenty of Money, Not Enough Momentum And The Real Story Behind the Charts
Call Money / Interbank Rate: The Cost of Overnight Dollars
The call money/interbank rate is basically the overnight price of dollars inside the banking system. When it’s rising hard, money is getting more expensive and everyone becomes more careful. When it peaks and starts drifting lower like it is now, it usually means the tightening phase is behind us and policy is shifting from slam the brakes to ease off, not because everything is magically fine, but because the system doesn’t need more pressure.
M2 Velocity: A Huge Pile of Money Doing Less Work
Now put that next to M2 velocity. Velocity is nominal GDP divided by the money supply. So it rises when the economy is producing and spending faster than the pile of money is growing, and it flattens or falls when cash piles up faster than real activity. The key detail…velocity has recovered from the COVID crash, but it’s not accelerating anymore. That’s the tell. It’s the part of the cycle where the economy stops getting free momentum and starts needing real follow through.
M2 Level: Liquidity Is Plentiful, But Motion Is Weak
And then there’s the M2 level itself. M2 is still huge. That matters because it tells you liquidity exists. But it also creates a trap for interpretation…a high money supply doesn’t guarantee a strong economy if that money is sitting in deposits and money funds or trapped inside balance sheets instead of moving through real demand. High M2 with flat velocity is a lot of water in the reservoir, but weaker flow through the pipes.
What I Think It’s Foreshadowing
Here’s where it stops being academic. While the market can point to some clean looking corporate default charts, the ground level data is getting uglier where credit card delinquencies are elevated, auto delinquencies are up, student loan stress is back now that payments restarted, and commercial real estate is still a slow motion problem. That’s what late cycle tightening looks like in real life, the pain shows up first in consumers and smaller borrowers, not the strongest corporate names that can refinance, extend maturities, or shift risk into private credit before a default prints.
At the same time, corporate bankruptcies running at the hottest pace in years is exactly what you’d expect after a long stretch of higher for longer finally works its way through the system. A lot of companies survived the last few years on cheap debt, covenant lite structures, and time. When that refinancing window closes, the math gets simple fast…more cash flow goes to interest, less goes to growth, and the weak hands start dropping.
Now layer in the policy backdrop…rate cuts beginning and quantitative tightening ending with reinvestment. That’s a shift toward adding liquidity back. It can stabilize markets, and it can buy time but it doesn’t instantly repair household balance sheets or reverse the lagged damage from the prior tightening. It mainly changes where the stress shows up first…less in funding markets, more in the real economy and in credit quality.
What I’m watching next is if rates keep easing and velocity still can’t push higher, that’s usually the sign that cheaper money is meeting a cautious private sector with more saving, fewer transactions, slower turnover.
Watch delinquencies, watch bankruptcies, watch credit spreads, and watch hiring. That’s where the cycle finally admits what the headlines try to smooth over.
tweet
Plenty of Money, Not Enough Momentum And The Real Story Behind the Charts
Call Money / Interbank Rate: The Cost of Overnight Dollars
The call money/interbank rate is basically the overnight price of dollars inside the banking system. When it’s rising hard, money is getting more expensive and everyone becomes more careful. When it peaks and starts drifting lower like it is now, it usually means the tightening phase is behind us and policy is shifting from slam the brakes to ease off, not because everything is magically fine, but because the system doesn’t need more pressure.
M2 Velocity: A Huge Pile of Money Doing Less Work
Now put that next to M2 velocity. Velocity is nominal GDP divided by the money supply. So it rises when the economy is producing and spending faster than the pile of money is growing, and it flattens or falls when cash piles up faster than real activity. The key detail…velocity has recovered from the COVID crash, but it’s not accelerating anymore. That’s the tell. It’s the part of the cycle where the economy stops getting free momentum and starts needing real follow through.
M2 Level: Liquidity Is Plentiful, But Motion Is Weak
And then there’s the M2 level itself. M2 is still huge. That matters because it tells you liquidity exists. But it also creates a trap for interpretation…a high money supply doesn’t guarantee a strong economy if that money is sitting in deposits and money funds or trapped inside balance sheets instead of moving through real demand. High M2 with flat velocity is a lot of water in the reservoir, but weaker flow through the pipes.
What I Think It’s Foreshadowing
Here’s where it stops being academic. While the market can point to some clean looking corporate default charts, the ground level data is getting uglier where credit card delinquencies are elevated, auto delinquencies are up, student loan stress is back now that payments restarted, and commercial real estate is still a slow motion problem. That’s what late cycle tightening looks like in real life, the pain shows up first in consumers and smaller borrowers, not the strongest corporate names that can refinance, extend maturities, or shift risk into private credit before a default prints.
At the same time, corporate bankruptcies running at the hottest pace in years is exactly what you’d expect after a long stretch of higher for longer finally works its way through the system. A lot of companies survived the last few years on cheap debt, covenant lite structures, and time. When that refinancing window closes, the math gets simple fast…more cash flow goes to interest, less goes to growth, and the weak hands start dropping.
Now layer in the policy backdrop…rate cuts beginning and quantitative tightening ending with reinvestment. That’s a shift toward adding liquidity back. It can stabilize markets, and it can buy time but it doesn’t instantly repair household balance sheets or reverse the lagged damage from the prior tightening. It mainly changes where the stress shows up first…less in funding markets, more in the real economy and in credit quality.
What I’m watching next is if rates keep easing and velocity still can’t push higher, that’s usually the sign that cheaper money is meeting a cautious private sector with more saving, fewer transactions, slower turnover.
Watch delinquencies, watch bankruptcies, watch credit spreads, and watch hiring. That’s where the cycle finally admits what the headlines try to smooth over.
tweet
Offshore
Photo
App Economy Insights
📊 This Week in Visuals
❄️ $SNOW: RPO Surge
🌐 $IOT: Profitable Scale
🖥️ $HPE: Networking Pivot
👁️ $S: AI Traction & CFO Exit
🔐 $OKTA: AI Identity in Focus
🔷 $RBRK: Cyber Resilience Breakout
and many more!
https://t.co/745tO23SlQ
tweet
📊 This Week in Visuals
❄️ $SNOW: RPO Surge
🌐 $IOT: Profitable Scale
🖥️ $HPE: Networking Pivot
👁️ $S: AI Traction & CFO Exit
🔐 $OKTA: AI Identity in Focus
🔷 $RBRK: Cyber Resilience Breakout
and many more!
https://t.co/745tO23SlQ
tweet