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Fiscal.ai
Chris Hohn is one of the best investors of the 21st century
He's earned ~18% a year for 2 decades by owning the world's most durable businesses.
Here are the 3 qualities he looks for in a company: https://t.co/zNp6KZK6wq
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Chris Hohn is one of the best investors of the 21st century
He's earned ~18% a year for 2 decades by owning the world's most durable businesses.
Here are the 3 qualities he looks for in a company: https://t.co/zNp6KZK6wq
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memenodes
when mom said go outside and get a real job, your crypto stuff didn't work out https://t.co/p6vRB0mF0a
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when mom said go outside and get a real job, your crypto stuff didn't work out https://t.co/p6vRB0mF0a
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The Few Bets That Matter
$BABA will crumble under massive Chinese compute demand.
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$BABA will crumble under massive Chinese compute demand.
Rumors: China's Ministry of Industry and Information Technology (MIIT) Guidelines Regarding H200 Imports
1. If you have the capability to train models (Alibaba, Tencent, ByteDance, DeepSeek, the "Six Little Tigers"*, mid-tier LLM teams), and you want H200s, they will be directly approved;
2. If you are a neocloud, willing to sell [compute] to clients, and you are not a shell company, you can buy H200s;
3. If you are a reseller (middleman), attempting to hire a bunch of PhDs to set up a facade and falsely claim that you can "refine pills" (slang for training AI models), then don't buy for now;
4. If you want to do inference, are a traditional enterprise, and want on-premise private deployment, or if you are an equipment supplier for these enterprises buying a heap of GPGPUs or ASICs locally to run DeepSeek to handle your bit of business — don't buy for now either. Prioritize purchasing products from Huawei, Cambricon, etc., or go to big LLM companies and buy APIs directly; don't do private deployment.
$NVDA tweet
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EndGame Macro
H.8: Credit Is Expanding, Flexibility Is Shrinking
Total bank credit is still expanding at roughly 5–6% annualized. Lending hasn’t frozen. Banks are still making loans. On the surface, the system appears functional.
But the composition of that growth matters. Nearly all of it is coming from loans and leases, running close to 6% year over year, while securities holdings are flat to slightly negative. Banks are not building liquid buffers. They’re adding credit risk. That’s fine in a strong economy with easy funding. It’s much riskier when growth is slowing and funding is tightening.
Deposits are no longer doing the work
Deposit growth has essentially stalled. On a short term annualized basis, it’s near zero.
Inside that flat number, the mix is shifting in an uncomfortable way. Lower cost “other deposits” are declining, while large time deposits are rising sharply. That usually means banks are paying up to keep money from leaving. This isn’t a run. It’s a repricing. But repricing raises funding costs, compresses margins, and increases rollover risk if rates stay high or volatility picks up.
Liquidity cushions are thinner
Cash assets have dropped from roughly $3.23T to $2.92T over the past year, more than a $300B decline. Some of that reflects reserves leaving the system, but the practical effect is less immediately usable liquidity.
Banks have offset this by holding more fed funds sold and reverse repos, so liquidity hasn’t disappeared, but it’s become more conditional. At the same time, total bank assets are now shrinking on a short term annualized basis, which signals balance sheet defense, not expansion.
Borrowings are being cut back
Borrowings are falling sharply year over year. That can reflect prudent derisking of expensive funding, or simply fewer attractive funding options. Either way, it signals constraint, not abundance.
Where the risk is concentrated
Commercial real estate exposure remains skewed. Small banks hold about $2.08T in CRE loans, compared with roughly $0.85T at large banks. Office vacancy rates are around 18–19%, and CMBS office delinquencies are near 12%, both record highs. CRE doesn’t need a price collapse to hurt and just refinancing at higher rates with weak cash flow is enough, and that pressure lands where capital buffers are thinner.
At the same time, large banks’ lending to non depository financial institutions has jumped from about $770B to $1.13T, a roughly 45% increase year over year. In calm markets that looks like intermediation. In stress, it becomes a fast transmission channel.
The backdrop isn’t helping
Consumer stress is rising. Subprime auto 60 day delinquencies are around 6.5%, a record. Credit card delinquencies are near 3%, elevated. Student loan delinquencies are back, with 9–10% of balances 90+ days past due and some measures showing 30% of borrowers behind.
Labor and business data are weakening. Over 1.17M job cuts have been announced in 2025, the highest since 2020. Initial claims are near 236k, continuing claims around 1.8M, and business bankruptcies are up roughly 5–6% year over year.
The uncomfortable takeaway
Loan loss allowances are not rising meaningfully yet, which is typical late cycle behavior. Recognition usually lags reality.
The system right now is reallocating risk while losing flexibility with more loans, less cash, flat deposits, higher funding costs, CRE concentrated at small banks, and growing exposure to the nonbank system. It works as long as losses stay deferred. That’s what makes this phase dangerous…not because it looks bad, but because it still looks orderly.
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H.8: Credit Is Expanding, Flexibility Is Shrinking
Total bank credit is still expanding at roughly 5–6% annualized. Lending hasn’t frozen. Banks are still making loans. On the surface, the system appears functional.
But the composition of that growth matters. Nearly all of it is coming from loans and leases, running close to 6% year over year, while securities holdings are flat to slightly negative. Banks are not building liquid buffers. They’re adding credit risk. That’s fine in a strong economy with easy funding. It’s much riskier when growth is slowing and funding is tightening.
Deposits are no longer doing the work
Deposit growth has essentially stalled. On a short term annualized basis, it’s near zero.
Inside that flat number, the mix is shifting in an uncomfortable way. Lower cost “other deposits” are declining, while large time deposits are rising sharply. That usually means banks are paying up to keep money from leaving. This isn’t a run. It’s a repricing. But repricing raises funding costs, compresses margins, and increases rollover risk if rates stay high or volatility picks up.
Liquidity cushions are thinner
Cash assets have dropped from roughly $3.23T to $2.92T over the past year, more than a $300B decline. Some of that reflects reserves leaving the system, but the practical effect is less immediately usable liquidity.
Banks have offset this by holding more fed funds sold and reverse repos, so liquidity hasn’t disappeared, but it’s become more conditional. At the same time, total bank assets are now shrinking on a short term annualized basis, which signals balance sheet defense, not expansion.
Borrowings are being cut back
Borrowings are falling sharply year over year. That can reflect prudent derisking of expensive funding, or simply fewer attractive funding options. Either way, it signals constraint, not abundance.
Where the risk is concentrated
Commercial real estate exposure remains skewed. Small banks hold about $2.08T in CRE loans, compared with roughly $0.85T at large banks. Office vacancy rates are around 18–19%, and CMBS office delinquencies are near 12%, both record highs. CRE doesn’t need a price collapse to hurt and just refinancing at higher rates with weak cash flow is enough, and that pressure lands where capital buffers are thinner.
At the same time, large banks’ lending to non depository financial institutions has jumped from about $770B to $1.13T, a roughly 45% increase year over year. In calm markets that looks like intermediation. In stress, it becomes a fast transmission channel.
The backdrop isn’t helping
Consumer stress is rising. Subprime auto 60 day delinquencies are around 6.5%, a record. Credit card delinquencies are near 3%, elevated. Student loan delinquencies are back, with 9–10% of balances 90+ days past due and some measures showing 30% of borrowers behind.
Labor and business data are weakening. Over 1.17M job cuts have been announced in 2025, the highest since 2020. Initial claims are near 236k, continuing claims around 1.8M, and business bankruptcies are up roughly 5–6% year over year.
The uncomfortable takeaway
Loan loss allowances are not rising meaningfully yet, which is typical late cycle behavior. Recognition usually lags reality.
The system right now is reallocating risk while losing flexibility with more loans, less cash, flat deposits, higher funding costs, CRE concentrated at small banks, and growing exposure to the nonbank system. It works as long as losses stay deferred. That’s what makes this phase dangerous…not because it looks bad, but because it still looks orderly.
Now available: Weekly data on the H.8 release, Assets and Liabilities of Commercial Banks in the United States #FedData https://t.co/WeJhdaAjBV tweet
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App Economy Insights
What are you watching this week?
• Wednesday: $MU $GIS
• Thursday: $NKE $ACN $FDX $DRI $BIRK
• Friday: $CCL
All visualized in our newsletter! https://t.co/XFVpL9AkBq
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What are you watching this week?
• Wednesday: $MU $GIS
• Thursday: $NKE $ACN $FDX $DRI $BIRK
• Friday: $CCL
All visualized in our newsletter! https://t.co/XFVpL9AkBq
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App Economy Insights
$ORCL Oracle just raised its FY26 CapEx forecast by $15B to $50B, fueling fears about debt and cash burn.
Free cash flow declined to negative $13B over the past 12 months (negative $10B in the last quarter alone).
The backlog is surging, but so is the bill to build it. https://t.co/Hvxc1oVnpi
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$ORCL Oracle just raised its FY26 CapEx forecast by $15B to $50B, fueling fears about debt and cash burn.
Free cash flow declined to negative $13B over the past 12 months (negative $10B in the last quarter alone).
The backlog is surging, but so is the bill to build it. https://t.co/Hvxc1oVnpi
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