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EndGame Macro
A Quiet Exit From Services Stocks Is Telling a Loud Macro Story
This is the unwinding of a trade that worked incredibly well for three years straight. From 2021 through mid 2024, funds kept piling into consumer services names…travel, leisure, dining because the post Covid boom made them look bulletproof. That overweight kept climbing, peaking near the highest levels of the entire decade.
Now the line is collapsing. Funds aren’t necessarily turning bearish on the whole sector; they’re simply rushing out of a crowded long at the same time. When positioning gets this heavy and then reverses this sharply, it almost always reflects a shift in how managers see the underlying economy, not just the sector.
The Macro Message Behind the Move
The deeper read is pretty simple…the consumer is losing altitude. Not in a dramatic, crisis like way, more in the steady, grinding way that shows up before unemployment rises and before earnings revisions start rolling in. Travel demand is cooling, dining traffic is softer, and households are being more selective. At the same time, these businesses still face high labor costs, elevated rents, and expensive financing. That combination makes the sector extremely sensitive to even small changes in demand.
Hedge funds know this. They’re looking at slower spending, softer labor data, and a yield curve that still hasn’t fully eased on the long end. And they’re asking themselves a practical question…“Why stay overloaded in a cyclical sector right as the economy is losing steam?” What we’re seeing on the chart is their answer…
My View
To me, this is a cycle signal. The reopening and high spend phase is behind us, the consumer is no longer overpowered by savings and stimulus, and investors are starting to reposition for a slower backdrop. If economic data continues to cool, this rotation will look smart. If the consumer finds new life, it may look premature.
But based on the way this curve has turned and how quickly, it feels more like funds are stepping out ahead of a shift rather than chasing a headline. Sometimes the flow tells the story before the data does. This looks like one of those moments.
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A Quiet Exit From Services Stocks Is Telling a Loud Macro Story
This is the unwinding of a trade that worked incredibly well for three years straight. From 2021 through mid 2024, funds kept piling into consumer services names…travel, leisure, dining because the post Covid boom made them look bulletproof. That overweight kept climbing, peaking near the highest levels of the entire decade.
Now the line is collapsing. Funds aren’t necessarily turning bearish on the whole sector; they’re simply rushing out of a crowded long at the same time. When positioning gets this heavy and then reverses this sharply, it almost always reflects a shift in how managers see the underlying economy, not just the sector.
The Macro Message Behind the Move
The deeper read is pretty simple…the consumer is losing altitude. Not in a dramatic, crisis like way, more in the steady, grinding way that shows up before unemployment rises and before earnings revisions start rolling in. Travel demand is cooling, dining traffic is softer, and households are being more selective. At the same time, these businesses still face high labor costs, elevated rents, and expensive financing. That combination makes the sector extremely sensitive to even small changes in demand.
Hedge funds know this. They’re looking at slower spending, softer labor data, and a yield curve that still hasn’t fully eased on the long end. And they’re asking themselves a practical question…“Why stay overloaded in a cyclical sector right as the economy is losing steam?” What we’re seeing on the chart is their answer…
My View
To me, this is a cycle signal. The reopening and high spend phase is behind us, the consumer is no longer overpowered by savings and stimulus, and investors are starting to reposition for a slower backdrop. If economic data continues to cool, this rotation will look smart. If the consumer finds new life, it may look premature.
But based on the way this curve has turned and how quickly, it feels more like funds are stepping out ahead of a shift rather than chasing a headline. Sometimes the flow tells the story before the data does. This looks like one of those moments.
Hedge Funds are dumping consumer services stocks (hotels, restaurants) at the fastest pace in AT LEAST 5 years 🚨🚨 https://t.co/cSEjrbXf1T tweet
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EndGame Macro
This is the Fed’s polite way of saying, “There’s a lot more leverage under the hood than people realize.”
What stands out is how fast the prime brokerage and repo lines have climbed over the last few years. Prime broker financing tells you equity books are running bigger and more levered. Repo financing tells you fixed income trades, especially Treasury arbitrage have ballooned. Put together, it shows a market leaning heavily on borrowed money at a time when both volatility and issuance have been rising.
And here’s the part that matters: this kind of leverage works beautifully when everything is calm. It juices returns, smooths spreads, and makes the whole system look more liquid than it really is. But it cuts the other way when conditions shift. If funding tightens, haircuts rise, or volatility jumps, these same trades unwind quickly…not because sentiment changes, but because margin calls force them to.
So the chart is a reminder of how modern markets function…hedge funds provide liquidity, but they also borrow a lot to do it. As long as financing stays easy, this structure holds. When it wobbles, this is exactly where cracks tend to show up first.
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This is the Fed’s polite way of saying, “There’s a lot more leverage under the hood than people realize.”
What stands out is how fast the prime brokerage and repo lines have climbed over the last few years. Prime broker financing tells you equity books are running bigger and more levered. Repo financing tells you fixed income trades, especially Treasury arbitrage have ballooned. Put together, it shows a market leaning heavily on borrowed money at a time when both volatility and issuance have been rising.
And here’s the part that matters: this kind of leverage works beautifully when everything is calm. It juices returns, smooths spreads, and makes the whole system look more liquid than it really is. But it cuts the other way when conditions shift. If funding tightens, haircuts rise, or volatility jumps, these same trades unwind quickly…not because sentiment changes, but because margin calls force them to.
So the chart is a reminder of how modern markets function…hedge funds provide liquidity, but they also borrow a lot to do it. As long as financing stays easy, this structure holds. When it wobbles, this is exactly where cracks tend to show up first.
Hedge funds often augment their investment positions using leverage. The leverage sources can be divided into three categories: prime brokerage, repo, and other secured borrowing. Prime brokerage and repo borrowing have increased rapidly over the past few years, as shown in this chart. Learn more: https://t.co/ep6ItQTBlh tweet
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EndGame Macro
https://t.co/xAJ2xvWTPi
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https://t.co/xAJ2xvWTPi
*FED'S HAMMACK SAYS WORRIED ABOUT THE LABOR MARKET: MARKETWATCH
turning dovish tweet
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EndGame Macro
RT @APompliano: From the Desk of Anthony Pompliano
0:00 Home Affordability Is Impacting Everything
6:30 Warren Buffett Shares His Final Notes
8:32 Milton Friedman’s Recipe For Economic Policy Success
Enjoy! https://t.co/ex3Sqc9EZ4
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RT @APompliano: From the Desk of Anthony Pompliano
0:00 Home Affordability Is Impacting Everything
6:30 Warren Buffett Shares His Final Notes
8:32 Milton Friedman’s Recipe For Economic Policy Success
Enjoy! https://t.co/ex3Sqc9EZ4
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EndGame Macro
RT @GeorgeGammon: Bitcoin And MSTR Are Crashing (What You Need To Know) https://t.co/457R0Agkdb
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RT @GeorgeGammon: Bitcoin And MSTR Are Crashing (What You Need To Know) https://t.co/457R0Agkdb
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X (formerly Twitter)
George Gammon
Bitcoin And MSTR Are Crashing (What You Need To Know)
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EndGame Macro
RT @onechancefreedm: The EndGame Legacy Series, No. 1 Hetty Green “The Witch of Wall Street” and the Power of Discipline
Where She Came From
Hetty Green wasn’t born into an ordinary family fortune, she came from a New Bedford whaling empire. Her father and grandfather made their money in one of the most profitable industries of the 19th century: whale oil, shipping, and global trade. The Robinsons weren’t flashy; they were hard edged New England merchants who believed money was something you guarded, not flaunted. Hetty grew up in that world. When her grandfather’s eyesight began failing, teenage Hetty read the financial pages to him every day. That routine…reading markets aloud, absorbing how capital flowed became her education. By the time she was a young woman, she understood balance sheets better than most bankers.
Her wealth didn’t fall into her lap. When her father died, and later her wealthy aunt, the inheritance came with legal fights, contested wills, and a wall of men who assumed a woman couldn’t manage millions. Hetty battled them all in court…calmly, relentlessly until she secured full control of the capital. Whatever people thought of her, she had something rare for a woman in the 1800s: total financial independence.
How She Built It Bigger
Once she controlled the money, she didn’t chase trends. While others speculated in flashy railroad stocks, Hetty bought what she considered real value: bonds, mortgages, railroads with actual cash flow, and city debt she knew would be repaid. She kept enormous cash reserves, not because she was fearful, but because she understood cycles. When panics hit and they hit often in that era cash wasn’t just safety. It was leverage.
During the 1873, 1884, 1893, and 1907 crises, Wall Street was full of men begging for liquidity. Hetty was one of the few people who had it. She lent to brokers, corporations, and even the City of New York. Sometimes she charged tough rates, sometimes she lent below market because she liked the collateral but she always dictated the terms. She didn’t need the system; the system needed her.
Her stinginess became legend, the black dress, the boardinghouses, the refusal to waste money. But to her, minimizing lifestyle creep wasn’t a quirk. It was strategy. The lower her burn rate, the more firepower she had in the next downturn.
What She Accomplished
By the time she died in 1916, Hetty Green had built one of the largest private fortunes in American history. Estimates vary, but in today’s dollars she was solidly in multi billionaire territory. And unlike many fortunes of the era, hers was built through discipline, not luck. After her children died, most of the family wealth ultimately flowed to hospitals, schools, and public causes, a quiet, unexpected philanthropic legacy from a woman many assumed was simply frugal to a fault.
What Her Life Still Teaches
Hetty Green is a reminder that wealth isn’t just about finding the right investments, it’s about being the same person in the boom as you are in the bust. She shows that liquidity is underrated, patience is misunderstood, and independence is a superpower in any era. She never needed to impress anyone, and that gave her clarity when everyone else was losing theirs.
Her story is simple but profound:
Know what something is worth.
Buy it when no one else wants it.
Hold it when they call you crazy.
And keep enough cash so you never have to compromise.
That’s not just a Gilded Age strategy. That’s an EndGame strategy.
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RT @onechancefreedm: The EndGame Legacy Series, No. 1 Hetty Green “The Witch of Wall Street” and the Power of Discipline
Where She Came From
Hetty Green wasn’t born into an ordinary family fortune, she came from a New Bedford whaling empire. Her father and grandfather made their money in one of the most profitable industries of the 19th century: whale oil, shipping, and global trade. The Robinsons weren’t flashy; they were hard edged New England merchants who believed money was something you guarded, not flaunted. Hetty grew up in that world. When her grandfather’s eyesight began failing, teenage Hetty read the financial pages to him every day. That routine…reading markets aloud, absorbing how capital flowed became her education. By the time she was a young woman, she understood balance sheets better than most bankers.
Her wealth didn’t fall into her lap. When her father died, and later her wealthy aunt, the inheritance came with legal fights, contested wills, and a wall of men who assumed a woman couldn’t manage millions. Hetty battled them all in court…calmly, relentlessly until she secured full control of the capital. Whatever people thought of her, she had something rare for a woman in the 1800s: total financial independence.
How She Built It Bigger
Once she controlled the money, she didn’t chase trends. While others speculated in flashy railroad stocks, Hetty bought what she considered real value: bonds, mortgages, railroads with actual cash flow, and city debt she knew would be repaid. She kept enormous cash reserves, not because she was fearful, but because she understood cycles. When panics hit and they hit often in that era cash wasn’t just safety. It was leverage.
During the 1873, 1884, 1893, and 1907 crises, Wall Street was full of men begging for liquidity. Hetty was one of the few people who had it. She lent to brokers, corporations, and even the City of New York. Sometimes she charged tough rates, sometimes she lent below market because she liked the collateral but she always dictated the terms. She didn’t need the system; the system needed her.
Her stinginess became legend, the black dress, the boardinghouses, the refusal to waste money. But to her, minimizing lifestyle creep wasn’t a quirk. It was strategy. The lower her burn rate, the more firepower she had in the next downturn.
What She Accomplished
By the time she died in 1916, Hetty Green had built one of the largest private fortunes in American history. Estimates vary, but in today’s dollars she was solidly in multi billionaire territory. And unlike many fortunes of the era, hers was built through discipline, not luck. After her children died, most of the family wealth ultimately flowed to hospitals, schools, and public causes, a quiet, unexpected philanthropic legacy from a woman many assumed was simply frugal to a fault.
What Her Life Still Teaches
Hetty Green is a reminder that wealth isn’t just about finding the right investments, it’s about being the same person in the boom as you are in the bust. She shows that liquidity is underrated, patience is misunderstood, and independence is a superpower in any era. She never needed to impress anyone, and that gave her clarity when everyone else was losing theirs.
Her story is simple but profound:
Know what something is worth.
Buy it when no one else wants it.
Hold it when they call you crazy.
And keep enough cash so you never have to compromise.
That’s not just a Gilded Age strategy. That’s an EndGame strategy.
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Finding Compounders
Companies get the Shareholders they deserve
A piece from Warren Buffett’s 1979 shareholder letter https://t.co/BwKBcTkL0i
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Companies get the Shareholders they deserve
A piece from Warren Buffett’s 1979 shareholder letter https://t.co/BwKBcTkL0i
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