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EndGame Macro
When Borrowing Now Stops Being Cheap Later
The blue bars are the total global debt in dollars, and it just keeps grinding higher to new records. The red line is the global debt as a share of world GDP. That ratio exploded during COVID when governments borrowed aggressively and GDP collapsed, then eased as economies reopened and inflation boosted nominal growth.
At a glance, that easing makes things look more stable than they really are. The ratio going sideways doesn’t mean the system healed. It mostly means the denominator caught up for a while.
Why the picture is more fragile than it looks
The real shift isn’t the level of debt, it’s the cost of carrying it. When rates were near zero, you could pile on debt without immediate consequences. Now that rates are structurally higher, the pressure shows up in budgets, not charts. Interest expense starts eating fiscal space, and new borrowing increasingly goes toward servicing old borrowing rather than doing anything productive.
There’s also a political reality baked into this. Aging populations, healthcare, defense, supply chain reshoring, energy security…none of that is optional, and none of it is cheap. Democracies don’t like upfront pain, so deficits become permanent. Borrowing isn’t a temporary bridge anymore; it’s the default setting.
If you zoom out further the world is less stable and less efficient than it was a decade ago. Globalization isn’t gone, but it’s messier. Redundancy replaces efficiency. Geopolitics replaces pure economics. That all costs money, and governments are the ones footing the bill.
The takeaway
So this chart shows that every shock gets handled the same way…borrow first, worry later and the cost of that keeps climbing.
The risk isn’t the size of the debt by itself. It’s that the old assumptions behind it, that cheap money, plenty of time, and steady growth are starting to break down.
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When Borrowing Now Stops Being Cheap Later
The blue bars are the total global debt in dollars, and it just keeps grinding higher to new records. The red line is the global debt as a share of world GDP. That ratio exploded during COVID when governments borrowed aggressively and GDP collapsed, then eased as economies reopened and inflation boosted nominal growth.
At a glance, that easing makes things look more stable than they really are. The ratio going sideways doesn’t mean the system healed. It mostly means the denominator caught up for a while.
Why the picture is more fragile than it looks
The real shift isn’t the level of debt, it’s the cost of carrying it. When rates were near zero, you could pile on debt without immediate consequences. Now that rates are structurally higher, the pressure shows up in budgets, not charts. Interest expense starts eating fiscal space, and new borrowing increasingly goes toward servicing old borrowing rather than doing anything productive.
There’s also a political reality baked into this. Aging populations, healthcare, defense, supply chain reshoring, energy security…none of that is optional, and none of it is cheap. Democracies don’t like upfront pain, so deficits become permanent. Borrowing isn’t a temporary bridge anymore; it’s the default setting.
If you zoom out further the world is less stable and less efficient than it was a decade ago. Globalization isn’t gone, but it’s messier. Redundancy replaces efficiency. Geopolitics replaces pure economics. That all costs money, and governments are the ones footing the bill.
The takeaway
So this chart shows that every shock gets handled the same way…borrow first, worry later and the cost of that keeps climbing.
The risk isn’t the size of the debt by itself. It’s that the old assumptions behind it, that cheap money, plenty of time, and steady growth are starting to break down.
"The Institute of International Finance estimates that global sovereign debt surged by $8 trillion in the third quarter, up more than 8% from the previous quarter. The US and China accounted for almost a third of the increase."
@johnauthers https://t.co/23smKIXCkB tweet
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memenodes
Do you keep your money onchain, on a CEX, or in a bank?
Crypto traders: https://t.co/P2BcvCAuvW
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Do you keep your money onchain, on a CEX, or in a bank?
Crypto traders: https://t.co/P2BcvCAuvW
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App Economy Insights
$ORCL Oracle just crashed 15% in 2 days.
It’s down over 40% from its September peak.
The backlog is wild ($523B).
But the cash burn is even wilder.
You need to see their cash flow chart. 👇
https://t.co/VL2r6J50Cv
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$ORCL Oracle just crashed 15% in 2 days.
It’s down over 40% from its September peak.
The backlog is wild ($523B).
But the cash burn is even wilder.
You need to see their cash flow chart. 👇
https://t.co/VL2r6J50Cv
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Quartr
"It pissed us off when somebody was wearing our high-tech products in the street with jeans. It really bugged us. It's like buying a Porsche and going shopping."
Olivier Bernhard knew the highs of a world-class triathlon career, and the strain of its closing years.
As injuries piled up, he began to wonder if there was room for a new kind of running sensation.
A prototype made from cut-up garden hose became CloudTec, the innovation behind "running on clouds."
What began in the Swiss Alps with a running shoe became a global sportswear brand.
Edge #70: On.
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"It pissed us off when somebody was wearing our high-tech products in the street with jeans. It really bugged us. It's like buying a Porsche and going shopping."
Olivier Bernhard knew the highs of a world-class triathlon career, and the strain of its closing years.
As injuries piled up, he began to wonder if there was room for a new kind of running sensation.
A prototype made from cut-up garden hose became CloudTec, the innovation behind "running on clouds."
What began in the Swiss Alps with a running shoe became a global sportswear brand.
Edge #70: On.
tweet
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Dimitry Nakhla | Babylon Capital®
“At the same time, I’ve found it important to balance those “builders” with the cash cows — $MA, $V, $SPGI, $FICO etc — businesses with exceptional FCF margins, durable moats, and minimal capital requirements.
𝐓𝐡𝐚𝐭 𝐜𝐨𝐦𝐛𝐢𝐧𝐚𝐭𝐢𝐨𝐧 𝐚𝐥𝐥𝐨𝐰𝐬 𝐚 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐭𝐨 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐀𝐈 𝐚𝐧𝐝 𝐜𝐥𝐨𝐮𝐝 𝐛𝐮𝐢𝐥𝐝𝐨𝐮𝐭 𝐰𝐡𝐢𝐥𝐞 𝐫𝐞𝐦𝐚𝐢𝐧𝐢𝐧𝐠 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐭𝐡𝐞 𝐂𝐚𝐩𝐄𝐱 𝐜𝐲𝐜𝐥𝐞 𝐜𝐨𝐨𝐥𝐬 𝐨𝐫 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐢𝐟𝐭𝐬.”
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“At the same time, I’ve found it important to balance those “builders” with the cash cows — $MA, $V, $SPGI, $FICO etc — businesses with exceptional FCF margins, durable moats, and minimal capital requirements.
𝐓𝐡𝐚𝐭 𝐜𝐨𝐦𝐛𝐢𝐧𝐚𝐭𝐢𝐨𝐧 𝐚𝐥𝐥𝐨𝐰𝐬 𝐚 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐭𝐨 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐀𝐈 𝐚𝐧𝐝 𝐜𝐥𝐨𝐮𝐝 𝐛𝐮𝐢𝐥𝐝𝐨𝐮𝐭 𝐰𝐡𝐢𝐥𝐞 𝐫𝐞𝐦𝐚𝐢𝐧𝐢𝐧𝐠 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐭𝐡𝐞 𝐂𝐚𝐩𝐄𝐱 𝐜𝐲𝐜𝐥𝐞 𝐜𝐨𝐨𝐥𝐬 𝐨𝐫 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐢𝐟𝐭𝐬.”
There are several respected investors who have long stayed away from companies like $GOOG, $AMZN, $MSFT & $META — skeptical of the returns on the enormous capital expenditures tied to cloud and AI infrastructure.
I understand the concern, but I don’t think that’s the right conclusion.
These businesses are building the digital backbone of the next decade, and exposure to them still remains beneficial.
At the same time, I’ve found it important to balance those “builders” with the cash cows — $MA, $V, $SPGI, $FICO etc — businesses with exceptional FCF margins, durable moats, and minimal capital requirements.
𝐓𝐡𝐚𝐭 𝐜𝐨𝐦𝐛𝐢𝐧𝐚𝐭𝐢𝐨𝐧 𝐚𝐥𝐥𝐨𝐰𝐬 𝐚 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐭𝐨 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐀𝐈 𝐚𝐧𝐝 𝐜𝐥𝐨𝐮𝐝 𝐛𝐮𝐢𝐥𝐝𝐨𝐮𝐭 𝐰𝐡𝐢𝐥𝐞 𝐫𝐞𝐦𝐚𝐢𝐧𝐢𝐧𝐠 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐭𝐡𝐞 𝐂𝐚𝐩𝐄𝐱 𝐜𝐲𝐜𝐥𝐞 𝐜𝐨𝐨𝐥𝐬 𝐨𝐫 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐢𝐟𝐭𝐬.
The builders power the future; the cash cows become even more efficient by leveraging AI within their own operations — expanding margins, driving automation, & compounding value quietly in the background.
Lately, we’ve seen many quality compounders sold down to compelling valuations, while capital has chased anything labeled “AI,” even pre-revenue businesses now worth tens of billions.
𝘛𝘩𝘢𝘵 𝘥𝘺𝘯𝘢𝘮𝘪𝘤 𝘭𝘪𝘬𝘦𝘭𝘺 𝘸𝘰𝘯’𝘵 𝘭𝘢𝘴𝘵 𝘧𝘰𝘳𝘦𝘷𝘦𝘳.
Eventually, when the market begins to see cracks in AI-related CapEx or re-evaluates growth expectations, capital will likely rotate back toward predictable, high-margin compounders quietly executing in the background.
It’s not about being contrarian against AI — it’s about being contrarian within quality.
The great opportunities often come from owning world-class businesses everyone’s temporarily disinterested in. tweet
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EndGame Macro
When the Freight Cushion Disappears
This is the Truckload Rejection Index basically the share of loads carriers are turning down even though they’re already under contract. When that number rises, it’s a sign the freight market is tightening and carriers are starting to get picky again.
What stands out here isn’t just the level, it’s the shape. Rejections drifted along for most of the year, then started climbing in the fall, and now they’ve jumped to a new 2025 high around 9.5%. That tells you the system has a lot less slack than it did a few months ago.
Why this is happening
The biggest driver isn’t a sudden demand boom. It’s capacity quietly leaving the market. After a long stretch of weak rates, marginal trucks get parked, small fleets disappear, and carriers stop running lanes that don’t make sense anymore. Everything looks calm until it isn’t.
There’s also a pricing mismatch at work. Contract rates adjust slowly. When spot rates start to firm, carriers reject lower paying contract freight and chase better opportunities. Rejections rise not because freight is exploding, but because leverage is shifting back toward carriers.
Seasonal friction just pours fuel on it. Year end volumes, weather, tighter delivery windows, none of these matter much when capacity is abundant. When it’s tight, every little disruption shows up in the data.
The real test from here
The key question is what happens after the holidays. If rejections fade back down, this was mostly a seasonal squeeze. If they stay elevated, it’s a sign the freight market has moved into a structurally tighter phase, one that feeds through to shipping costs, supply chains, and eventually prices.
This is an early warning that the cushion is thinner than people think.
tweet
When the Freight Cushion Disappears
This is the Truckload Rejection Index basically the share of loads carriers are turning down even though they’re already under contract. When that number rises, it’s a sign the freight market is tightening and carriers are starting to get picky again.
What stands out here isn’t just the level, it’s the shape. Rejections drifted along for most of the year, then started climbing in the fall, and now they’ve jumped to a new 2025 high around 9.5%. That tells you the system has a lot less slack than it did a few months ago.
Why this is happening
The biggest driver isn’t a sudden demand boom. It’s capacity quietly leaving the market. After a long stretch of weak rates, marginal trucks get parked, small fleets disappear, and carriers stop running lanes that don’t make sense anymore. Everything looks calm until it isn’t.
There’s also a pricing mismatch at work. Contract rates adjust slowly. When spot rates start to firm, carriers reject lower paying contract freight and chase better opportunities. Rejections rise not because freight is exploding, but because leverage is shifting back toward carriers.
Seasonal friction just pours fuel on it. Year end volumes, weather, tighter delivery windows, none of these matter much when capacity is abundant. When it’s tight, every little disruption shows up in the data.
The real test from here
The key question is what happens after the holidays. If rejections fade back down, this was mostly a seasonal squeeze. If they stay elevated, it’s a sign the freight market has moved into a structurally tighter phase, one that feeds through to shipping costs, supply chains, and eventually prices.
This is an early warning that the cushion is thinner than people think.
Truckload rejections continue to surge to 9.46%, a new 2025 high.
LFG! https://t.co/gL3kw3KWda tweet
The Few Bets That Matter
$NFLX used to be a compounder with solid growth, tons of cash flow and a huge market left to tap in.
The Warner Bros deal changes the risk profile. A $70B+ acquisition for a $420B company means leverage and execution risk.
It doesn’t mean failure. It means the market prices in risk and won't give the stock its premium anymore.
If anything, this could turn into a great opportunity given how great management has been and the potential of all the IPs.
But it’s going to take time.
tweet
$NFLX used to be a compounder with solid growth, tons of cash flow and a huge market left to tap in.
The Warner Bros deal changes the risk profile. A $70B+ acquisition for a $420B company means leverage and execution risk.
It doesn’t mean failure. It means the market prices in risk and won't give the stock its premium anymore.
If anything, this could turn into a great opportunity given how great management has been and the potential of all the IPs.
But it’s going to take time.
tweet