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EndGame Macro
When Banks Choose Certainty Over Comfort
The discount window is the Fed’s backstop for banks when funding gets awkward. If a bank needs cash and doesn’t like what it’s seeing in private markets, it can borrow directly from the Fed against good collateral. That’s the point…keep a temporary funding issue from turning into forced selling or something worse. It’s not meant to be a go to source of funding, and banks generally avoid it unless they have a reason to value certainty over optics or cost.
What’s different right now
This chart isn’t about a sudden crisis. It’s about a higher baseline of stress. Usage stepping up and staying elevated tells you private funding is less forgiving than it was earlier in the year. When markets are smooth, banks fund each other easily and cheaply. When volatility rises, deposits get more competitive, or counterparties get cautious, banks start preferring guaranteed liquidity even if it’s a little more expensive.
My View
Banks don’t tap the discount window because they’re bullish. They tap it because the system is getting tighter in subtle ways. Rate volatility, unrealized losses, balance sheet constraints, and year end pressures all push behavior in the same direction: don’t sell assets at bad prices, don’t rely on fragile funding, lock in certainty. This isn’t a red alert panic signal, but it is a sign that the plumbing is under more strain than the headlines suggest. Liquidity is still there but it’s becoming more selective, and that’s usually how stress shows up before anyone wants to call it a problem.
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When Banks Choose Certainty Over Comfort
The discount window is the Fed’s backstop for banks when funding gets awkward. If a bank needs cash and doesn’t like what it’s seeing in private markets, it can borrow directly from the Fed against good collateral. That’s the point…keep a temporary funding issue from turning into forced selling or something worse. It’s not meant to be a go to source of funding, and banks generally avoid it unless they have a reason to value certainty over optics or cost.
What’s different right now
This chart isn’t about a sudden crisis. It’s about a higher baseline of stress. Usage stepping up and staying elevated tells you private funding is less forgiving than it was earlier in the year. When markets are smooth, banks fund each other easily and cheaply. When volatility rises, deposits get more competitive, or counterparties get cautious, banks start preferring guaranteed liquidity even if it’s a little more expensive.
My View
Banks don’t tap the discount window because they’re bullish. They tap it because the system is getting tighter in subtle ways. Rate volatility, unrealized losses, balance sheet constraints, and year end pressures all push behavior in the same direction: don’t sell assets at bad prices, don’t rely on fragile funding, lock in certainty. This isn’t a red alert panic signal, but it is a sign that the plumbing is under more strain than the headlines suggest. Liquidity is still there but it’s becoming more selective, and that’s usually how stress shows up before anyone wants to call it a problem.
New high in discount window usage for 2025
Highest since April '24 https://t.co/heOsRavigS tweet
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EndGame Macro
When Credit Spreads Whisper Confidence And Risk Gets Loud
Credit spreads are just the market’s risk surcharge. It’s the extra yield investors demand to lend to companies instead of the government. When spreads are tight, investors feel comfortable, defaults feel far away, and liquidity feels reliable. Nobody thinks they’re being paid much for risk and they’re fine with that.
That’s what makes this moment interesting. Spreads this tight don’t mean risk is gone. They mean people believe it’s contained.
Why this isn’t as comforting as it looks
What you’re really seeing here is money crowding into the safest looking parts of credit. Big investment grade issuers still have a bid because pensions, insurers, ETFs, and foreign buyers want yield without touching obvious trouble. Meanwhile, a lot of the stress is hiding elsewhere like in private credit, commercial real estate, smaller balance sheets, and borrowers that don’t trade every day. Those pressures don’t show up neatly in an IG spread chart.
My Read
Spreads this tight say more about confidence in policy backstops than confidence in the economy. Investors are leaning on the idea that the system stays orderly, that refinancing works, and that policymakers step in if things wobble. That can hold for a while. But when spreads are already compressed, there’s very little upside left and a lot of downside if growth slows more than expected, downgrades pick up, or funding costs stay high because long term rates refuse to fall. This is a warning that the market is pricing a very smooth outcome, and smooth outcomes are fragile by definition.
tweet
When Credit Spreads Whisper Confidence And Risk Gets Loud
Credit spreads are just the market’s risk surcharge. It’s the extra yield investors demand to lend to companies instead of the government. When spreads are tight, investors feel comfortable, defaults feel far away, and liquidity feels reliable. Nobody thinks they’re being paid much for risk and they’re fine with that.
That’s what makes this moment interesting. Spreads this tight don’t mean risk is gone. They mean people believe it’s contained.
Why this isn’t as comforting as it looks
What you’re really seeing here is money crowding into the safest looking parts of credit. Big investment grade issuers still have a bid because pensions, insurers, ETFs, and foreign buyers want yield without touching obvious trouble. Meanwhile, a lot of the stress is hiding elsewhere like in private credit, commercial real estate, smaller balance sheets, and borrowers that don’t trade every day. Those pressures don’t show up neatly in an IG spread chart.
My Read
Spreads this tight say more about confidence in policy backstops than confidence in the economy. Investors are leaning on the idea that the system stays orderly, that refinancing works, and that policymakers step in if things wobble. That can hold for a while. But when spreads are already compressed, there’s very little upside left and a lot of downside if growth slows more than expected, downgrades pick up, or funding costs stay high because long term rates refuse to fall. This is a warning that the market is pricing a very smooth outcome, and smooth outcomes are fragile by definition.
U.S. Credit Spreads fall to lowest level since 1998 🤯👀 https://t.co/rCc8K2FHeY tweet
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EndGame Macro
When Workers Stop Quitting, the Clock Starts Ticking
The quits rate is really just a window into how secure people feel. Workers don’t quit when they’re nervous they quit when they’re confident they can land something better without much risk. When quits fall like this, it’s not a sign of comfort. It’s a sign people are choosing caution over mobility. That shift almost always shows up before the labor market weakens in more obvious ways.
That’s why this matters even if layoffs aren’t exploding yet. Companies rarely start with mass firings. First they slow hiring. Then workers stop quitting. Only later, when pressure builds, do layoffs follow.
What History Tends To Do Next
The part people forget is the timing. In 2008, quits fell to roughly these levels while was sitting around the 5% range. Then the turn came quickly. Within about six to nine months, unemployment accelerated sharply, eventually pushing past 10%. Quits didn’t fall because unemployment was already surging, they fell first, as workers sensed risk and stayed put. The unemployment spike was the lagged response, and it wasn’t gradual once it started.
That pattern shows up elsewhere too. Quits soften quietly, unemployment drifts at first, then rises much faster than people expect once firms move from caution to cuts.
What It’s Saying Now
Right now, this looks less like a collapse and more like a loss of confidence. Hiring is cooling, workers are staying put, and stress is creeping in where it usually does first in the consumer facing sectors. Pair that with rising delinquencies and tighter financial conditions, and the labor market looks more fragile than the headline numbers imply.
My Read
The labor market isn’t falling off a cliff yet, but it’s clearly losing altitude. And history says once quits fall and stay down, unemployment doesn’t stay flat forever, it just takes a little time for the math to catch up.
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When Workers Stop Quitting, the Clock Starts Ticking
The quits rate is really just a window into how secure people feel. Workers don’t quit when they’re nervous they quit when they’re confident they can land something better without much risk. When quits fall like this, it’s not a sign of comfort. It’s a sign people are choosing caution over mobility. That shift almost always shows up before the labor market weakens in more obvious ways.
That’s why this matters even if layoffs aren’t exploding yet. Companies rarely start with mass firings. First they slow hiring. Then workers stop quitting. Only later, when pressure builds, do layoffs follow.
What History Tends To Do Next
The part people forget is the timing. In 2008, quits fell to roughly these levels while was sitting around the 5% range. Then the turn came quickly. Within about six to nine months, unemployment accelerated sharply, eventually pushing past 10%. Quits didn’t fall because unemployment was already surging, they fell first, as workers sensed risk and stayed put. The unemployment spike was the lagged response, and it wasn’t gradual once it started.
That pattern shows up elsewhere too. Quits soften quietly, unemployment drifts at first, then rises much faster than people expect once firms move from caution to cuts.
What It’s Saying Now
Right now, this looks less like a collapse and more like a loss of confidence. Hiring is cooling, workers are staying put, and stress is creeping in where it usually does first in the consumer facing sectors. Pair that with rising delinquencies and tighter financial conditions, and the labor market looks more fragile than the headline numbers imply.
My Read
The labor market isn’t falling off a cliff yet, but it’s clearly losing altitude. And history says once quits fall and stay down, unemployment doesn’t stay flat forever, it just takes a little time for the math to catch up.
Jolts Quits. Leading indicator
At levels seen in recessions.
Yes the Labor market is weakening https://t.co/YXuFW5xHoM tweet
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EndGame Macro
I don’t think any of this starts where we usually point. It doesn’t start with fentanyl, or smartphones, or even COVID. Those things made it worse, no question. But they didn’t create the hole. They poured gasoline into something that had already been smoldering for a long time.
If you go back to the late 90s, a lot shifts at once. That’s when OxyContin gets pushed hard into the medical system. Pain stops being something you endure or manage and becomes something that should be eliminated completely. Doctors are told addiction risk is low. Patients are told relief is basically guaranteed. And everyone trusts the system because why wouldn’t they? It’s wrapped in credentials and white coats. When that story falls apart, the damage doesn’t unwind. It just mutates.
At the same time, work is changing in ways that don’t show up cleanly in charts. Manufacturing keeps shrinking. Unions lose leverage. Jobs get more flexible, which mostly means less secure. A lot of people are working just as hard, sometimes harder, but feeling more disposable. And when work stops anchoring people, the rest of life starts to wobble too.
Then the prescriptions dry up in the late 2000s. That’s supposed to fix things. Instead it just pushes people to heroin. Same pain, fewer rules. And then fentanyl hits in the early 2010s and rewrites the entire risk equation. At that point, it’s not about recklessness. It’s about the fact that one mistake can be fatal. There’s no buffer anymore.
Now layer in the economic side of this. Since the late 90s, most of the gains flow to people who already own assets. Stocks, housing, anything financial. If you’re in, you’re fine. If you’re not, you’re chasing a moving target. The middle gets squeezed. The bottom barely moves. That stress doesn’t stay in spreadsheets. It shows up in drinking, in depression, in people quietly checking out.
You see it in alcohol deaths almost doubling. You see it in suicide rates rising, especially among middle aged men and younger women. You see it in how much time people spend alone now compared to twenty years ago. Fewer places to belong. More screens. Less face to face life. It’s not that people forgot how to connect. It’s that the scaffolding that made connection normal just eroded.
COVID ripped the cover off. Isolation got sharper. Coping mechanisms broke. Deaths spiked. And even now, as some numbers improve, they’re settling at levels that would’ve been unthinkable a generation ago. That tells you something didn’t heal. It just reset lower.
This feels like decades of decisions that optimized for efficiency and profitability and quietly removed resilience. Institutions learned how to protect balance sheets and reputations, not people. When things broke, whether it was health, money, or work, people were left to handle it on their own. Most did for a long time. And then, at some point, they couldn’t anymore.
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I don’t think any of this starts where we usually point. It doesn’t start with fentanyl, or smartphones, or even COVID. Those things made it worse, no question. But they didn’t create the hole. They poured gasoline into something that had already been smoldering for a long time.
If you go back to the late 90s, a lot shifts at once. That’s when OxyContin gets pushed hard into the medical system. Pain stops being something you endure or manage and becomes something that should be eliminated completely. Doctors are told addiction risk is low. Patients are told relief is basically guaranteed. And everyone trusts the system because why wouldn’t they? It’s wrapped in credentials and white coats. When that story falls apart, the damage doesn’t unwind. It just mutates.
At the same time, work is changing in ways that don’t show up cleanly in charts. Manufacturing keeps shrinking. Unions lose leverage. Jobs get more flexible, which mostly means less secure. A lot of people are working just as hard, sometimes harder, but feeling more disposable. And when work stops anchoring people, the rest of life starts to wobble too.
Then the prescriptions dry up in the late 2000s. That’s supposed to fix things. Instead it just pushes people to heroin. Same pain, fewer rules. And then fentanyl hits in the early 2010s and rewrites the entire risk equation. At that point, it’s not about recklessness. It’s about the fact that one mistake can be fatal. There’s no buffer anymore.
Now layer in the economic side of this. Since the late 90s, most of the gains flow to people who already own assets. Stocks, housing, anything financial. If you’re in, you’re fine. If you’re not, you’re chasing a moving target. The middle gets squeezed. The bottom barely moves. That stress doesn’t stay in spreadsheets. It shows up in drinking, in depression, in people quietly checking out.
You see it in alcohol deaths almost doubling. You see it in suicide rates rising, especially among middle aged men and younger women. You see it in how much time people spend alone now compared to twenty years ago. Fewer places to belong. More screens. Less face to face life. It’s not that people forgot how to connect. It’s that the scaffolding that made connection normal just eroded.
COVID ripped the cover off. Isolation got sharper. Coping mechanisms broke. Deaths spiked. And even now, as some numbers improve, they’re settling at levels that would’ve been unthinkable a generation ago. That tells you something didn’t heal. It just reset lower.
This feels like decades of decisions that optimized for efficiency and profitability and quietly removed resilience. Institutions learned how to protect balance sheets and reputations, not people. When things broke, whether it was health, money, or work, people were left to handle it on their own. Most did for a long time. And then, at some point, they couldn’t anymore.
What a chart.
h/t @LukeGromen https://t.co/35yn90gWnl tweet
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crypto traders logging in daily just to stare at unrealized losses, mentally calculating how rich they’d be if they had sold the top https://t.co/RV9Zpp3Hs6
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crypto traders logging in daily just to stare at unrealized losses, mentally calculating how rich they’d be if they had sold the top https://t.co/RV9Zpp3Hs6
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When I say I’m going to rest and recharge all day this is what I meant https://t.co/UQWAqBSVOc
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When I say I’m going to rest and recharge all day this is what I meant https://t.co/UQWAqBSVOc
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me in 2006:
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me in 2006:
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TIME’s Person of the Year through the years:
2025: The Architects of AI
2024: Donald Trump
2023: Taylor Swift
2022: Volodymyr Zelensky & The Spirit of Ukraine
2021: Elon Musk
2020: Joe Biden & Kamala Harris
2019: Greta Thunberg
2018: The Guardians & The War on Truth
2017: The Silence Breakers (Me Too)
2016: Donald Trump
2015: Angela Merkel
2014: Ebola Fighters
2013: Pope Francis
2012: Barack Obama
2011: The Protester
2010: Mark Zuckerberg
2009: Ben Bernanke
2008: Barack Obama
2007: Vladimir Putin
2006: You
2005: The Good Samaritans
2004: George W. Bush
2003: The American Soldier
2002: The Whistleblowers
2001: Rudy Giuliani
2000: George W. Bush tweet