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EndGame Macro
The Truth About Reality We’re Not Ready to Admit
The Limits of Proof
These new papers claiming they’ve proven we’re not in a simulation sound confident, but once you actually read them, you see what they’re really ruling out. They argue the universe can’t be simulated because reality supposedly relies on non algorithmic understanding, something a computer could never reproduce. It’s an interesting argument, but it assumes any simulator would be bound by the same rules we’ve found from inside our own universe. That’s like a character in a video game insisting the developer can’t exist because the game physics don’t allow developers to exist. They’re only describing the box we’re in, not the world outside it.
And the Gödel angle they lean on, the idea that some truths can’t be fully captured by logic doesn’t really settle the question either. Maybe those incomplete edges are exactly what a simulation would disguise behind randomness. Maybe they’re artifacts of our own limits. It’s a clever mathematical argument, but it doesn’t close the door the way the headlines pretend it does.
The Moon, the Gaps, and the Feeling Something’s Off
Then you look at the stories we’ve told ourselves about our own history. We supposedly landed on the moon in 1969 with a computer weaker than the calculator on your phone… and then just stopped going. No bases. No tourism. No HD footage. No selfies with Earth hanging in the background. Whether you believe the moon landings happened exactly as written or not, the timeline still feels strange. Human beings don’t usually unlock a frontier and then ignore it for half a century. That gap, that mismatch between what we’re told and what feels plausible is the kind of thing that makes people wonder if the story we get is the full picture.
And that’s usually when the simulation question starts creeping in. Not because everything is fake, but because certain things don’t quite line up cleanly, and humans are wired to look for the bigger frame when the smaller one feels incomplete.
The Future That Makes the Theory Hard to Ignore
If you step back and look at our own technology curve, it becomes even harder to dismiss. Ten years ago, video games still looked like video games. AI was a gimmick. VR felt like a toy. Now we have photoreal graphics, AI that can hold convincing conversations, and immersive worlds that blur into real experience. If that’s what one decade looks like, imagine a hundred years. Imagine a thousand. It’s almost impossible to argue that advanced civilizations wouldn’t eventually reach a point where simulating something like us isn’t just possible, it’s trivial.
And that’s the whole tension…if simulation ever becomes possible, anywhere, at any point in the future, the odds we are the first generation become tiny. It’s far more likely that we’re somewhere down the chain rather than at the beginning of it. History is full of people who thought their moment was the center of everything. We’re probably not the exception.
What It Might Mean
Whether we’re in a simulation or not doesn’t automatically change the day to day. Pain would still be pain, love would still be love, choices would still matter. But it does mean the world might be built on rules or constraints we don’t fully understand. What we call laws of nature might just be the operating system. What we call mystery might be a boundary condition. And what scientists call non algorithmic understanding might just be a layer we’re not meant to access directly.
The truth is nobody actually knows what we’re living in. The physicists don’t know. The philosophers don’t know. The conspiracy theorists definitely don’t know. And the rest of us are just trying to make sense of a reality that feels deeper and stranger than the explanations we’re handed.
If anything, I’d say we understand far less about the nature of this place than we pretend.
🔥🚨BREAKING NEWS: UBC Okanagan Physicists just proved that the Universe isn’t a simulation a[...]
The Truth About Reality We’re Not Ready to Admit
The Limits of Proof
These new papers claiming they’ve proven we’re not in a simulation sound confident, but once you actually read them, you see what they’re really ruling out. They argue the universe can’t be simulated because reality supposedly relies on non algorithmic understanding, something a computer could never reproduce. It’s an interesting argument, but it assumes any simulator would be bound by the same rules we’ve found from inside our own universe. That’s like a character in a video game insisting the developer can’t exist because the game physics don’t allow developers to exist. They’re only describing the box we’re in, not the world outside it.
And the Gödel angle they lean on, the idea that some truths can’t be fully captured by logic doesn’t really settle the question either. Maybe those incomplete edges are exactly what a simulation would disguise behind randomness. Maybe they’re artifacts of our own limits. It’s a clever mathematical argument, but it doesn’t close the door the way the headlines pretend it does.
The Moon, the Gaps, and the Feeling Something’s Off
Then you look at the stories we’ve told ourselves about our own history. We supposedly landed on the moon in 1969 with a computer weaker than the calculator on your phone… and then just stopped going. No bases. No tourism. No HD footage. No selfies with Earth hanging in the background. Whether you believe the moon landings happened exactly as written or not, the timeline still feels strange. Human beings don’t usually unlock a frontier and then ignore it for half a century. That gap, that mismatch between what we’re told and what feels plausible is the kind of thing that makes people wonder if the story we get is the full picture.
And that’s usually when the simulation question starts creeping in. Not because everything is fake, but because certain things don’t quite line up cleanly, and humans are wired to look for the bigger frame when the smaller one feels incomplete.
The Future That Makes the Theory Hard to Ignore
If you step back and look at our own technology curve, it becomes even harder to dismiss. Ten years ago, video games still looked like video games. AI was a gimmick. VR felt like a toy. Now we have photoreal graphics, AI that can hold convincing conversations, and immersive worlds that blur into real experience. If that’s what one decade looks like, imagine a hundred years. Imagine a thousand. It’s almost impossible to argue that advanced civilizations wouldn’t eventually reach a point where simulating something like us isn’t just possible, it’s trivial.
And that’s the whole tension…if simulation ever becomes possible, anywhere, at any point in the future, the odds we are the first generation become tiny. It’s far more likely that we’re somewhere down the chain rather than at the beginning of it. History is full of people who thought their moment was the center of everything. We’re probably not the exception.
What It Might Mean
Whether we’re in a simulation or not doesn’t automatically change the day to day. Pain would still be pain, love would still be love, choices would still matter. But it does mean the world might be built on rules or constraints we don’t fully understand. What we call laws of nature might just be the operating system. What we call mystery might be a boundary condition. And what scientists call non algorithmic understanding might just be a layer we’re not meant to access directly.
The truth is nobody actually knows what we’re living in. The physicists don’t know. The philosophers don’t know. The conspiracy theorists definitely don’t know. And the rest of us are just trying to make sense of a reality that feels deeper and stranger than the explanations we’re handed.
If anything, I’d say we understand far less about the nature of this place than we pretend.
🔥🚨BREAKING NEWS: UBC Okanagan Physicists just proved that the Universe isn’t a simulation a[...]
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EndGame Macro The Truth About Reality We’re Not Ready to Admit The Limits of Proof These new papers claiming they’ve proven we’re not in a simulation sound confident, but once you actually read them, you see what they’re really ruling out. They argue the…
fter all and that we are all 100% real.
UBC Okanagan mathematically demonstrated that the universe cannot be simulated, using Gödel’s incompleteness theorem, scientists found that reality requires “non-algorithmic understanding,” something no computation can replicate.
This discovery disproves the simulation hypothesis and reveals that the universe’s foundations exist beyond any algorithmic system ‘and increases the likelihood of God being real.’ - Dom Lucre | Breaker of Narratives tweet
UBC Okanagan mathematically demonstrated that the universe cannot be simulated, using Gödel’s incompleteness theorem, scientists found that reality requires “non-algorithmic understanding,” something no computation can replicate.
This discovery disproves the simulation hypothesis and reveals that the universe’s foundations exist beyond any algorithmic system ‘and increases the likelihood of God being real.’ - Dom Lucre | Breaker of Narratives tweet
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EndGame Macro
China’s Housing Problem: The Crash They’re Stretching Over Years
China didn’t let the housing market crash outright, but they also haven’t been able to revive it. Year over year prices are still negative, and have been for more than two years. Month to month numbers are barely above zero. That’s the market lying flat on the floor, breathing shallowly.
What you’re really looking at is the long tail of the three red lines policy colliding with years of overbuilding, collapsing confidence, and a demographic slowdown that no stimulus package can easily reverse. When you cut off developers’ access to credit after a decade plus frenzy of debt fueled construction, you’re going to expose just how much of the demand was artificial. Evergrande and Country Garden were the headline blowups, but they weren’t the problem, they were the signal.
And now the sector is stuck in that awkward place where the government won’t let it die, but it also can’t bring it back to life.
Why It’s Playing Out This Way
China is choosing a slow bleed over a big bang. A full bailout might temporarily lift prices, but it would also reinflate the very bubble they’re trying to defuse, hammer the currency, and widen inequality at a time when social stability matters more than ever. So instead, Beijing is doing the minimum required to keep things from spiraling…easier mortgages, local governments buying leftover inventory, banks pushed to support unfinished projects.
But none of that creates new buyers. Households are tapped out, confidence is low, the population is shrinking, and the wealth effect that drove consumption for two decades has flipped into reverse. People don’t want a second apartment anymore, they want certainty and cash flow.
That’s why the chart looks the way it does. The worst of the decline is behind them, but the rebound that usually follows simply hasn’t showed up. And honestly, it probably won’t. The entire model to build, borrow, speculate, repeat has run its course.
China is not trying to revive the old housing boom. It’s trying to bury it slowly enough that the rest of the system can adjust. And that kind of transition doesn’t show up as a sharp recovery on a chart. It shows up exactly like this in a long, flat drag where prices don’t fall fast enough to force a reset, but don’t rise enough to restore confidence.
tweet
China’s Housing Problem: The Crash They’re Stretching Over Years
China didn’t let the housing market crash outright, but they also haven’t been able to revive it. Year over year prices are still negative, and have been for more than two years. Month to month numbers are barely above zero. That’s the market lying flat on the floor, breathing shallowly.
What you’re really looking at is the long tail of the three red lines policy colliding with years of overbuilding, collapsing confidence, and a demographic slowdown that no stimulus package can easily reverse. When you cut off developers’ access to credit after a decade plus frenzy of debt fueled construction, you’re going to expose just how much of the demand was artificial. Evergrande and Country Garden were the headline blowups, but they weren’t the problem, they were the signal.
And now the sector is stuck in that awkward place where the government won’t let it die, but it also can’t bring it back to life.
Why It’s Playing Out This Way
China is choosing a slow bleed over a big bang. A full bailout might temporarily lift prices, but it would also reinflate the very bubble they’re trying to defuse, hammer the currency, and widen inequality at a time when social stability matters more than ever. So instead, Beijing is doing the minimum required to keep things from spiraling…easier mortgages, local governments buying leftover inventory, banks pushed to support unfinished projects.
But none of that creates new buyers. Households are tapped out, confidence is low, the population is shrinking, and the wealth effect that drove consumption for two decades has flipped into reverse. People don’t want a second apartment anymore, they want certainty and cash flow.
That’s why the chart looks the way it does. The worst of the decline is behind them, but the rebound that usually follows simply hasn’t showed up. And honestly, it probably won’t. The entire model to build, borrow, speculate, repeat has run its course.
China is not trying to revive the old housing boom. It’s trying to bury it slowly enough that the rest of the system can adjust. And that kind of transition doesn’t show up as a sharp recovery on a chart. It shows up exactly like this in a long, flat drag where prices don’t fall fast enough to force a reset, but don’t rise enough to restore confidence.
China’s housing crash is accelerating:
New-home prices in China's 70 major cities fell -0.45% MoM in October, the steepest drop in a year.
At the same time, resale home prices fell -0.66% MoM, the largest decline in 13 months.
All 70 cities surveyed recorded declines in both new and resale home prices, confirming broad-based weakness across the entire market.
China’s property downturn has now lasted for over 4 years.
Meanwhile, a survey conducted by the China Index Academy across over 260 cities showed home-purchasing confidence in smaller cities dropped -2.9 percentage points MoM.
China's real estate crisis shows no signs of recovery. tweet
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EndGame Macro
The 401(k) Trick…Bigger Numbers, Weaker Dollars
The higher 401(k) limits look like a win. You can now save up to $24,500!…sounds empowering. But when you pair that with what’s happened to the dollar, the picture changes pretty quickly. Over the last decade plus, the currency has lost a huge chunk of its purchasing power. Between 2008 and 2025, prices rose roughly 50% in total meaning every dollar you save today buys materially less down the road. That’s why contribution limits keep rising: not because the system is generous, but because the dollar quietly buys less each year. The bars on the chart go up, but the value behind them doesn’t rise in the same way.
A $1 investment grows to $6.48 nominally, but inflation eats away about a third of that return, leaving just over $3 of real value and that’s before taxes. So when people get excited about higher limits, they’re usually thinking in nominal terms, not in terms of what those future dollars will actually afford.
Where Your Money Really Goes
Then there’s the structure of the 401(k) itself. Your contributions don’t just sit in an account; they flow into funds that charge ongoing fees. Sometimes it’s 0.3–0.5%, but it can be 1–2% depending on your plan. Those fees come out every single year, no matter how the market performs. They’re invisible, you never see a bill but they quietly siphon off a big chunk of your long term compounding.
In other words, your savings don’t just work for you. They also work for the fund companies, the plan providers, the brokers, and the managers who get paid whether your account grows in real terms or not. And the more you contribute, the bigger their slice becomes.
That’s why the whole setup feels a little backwards…the system constantly encourages you to put more in, but inflation weakens the value of those contributions, and fees skim the growth on the back end. By the time you retire, you’ve carried the inflation risk, the market risk, and the tax risk while everyone else involved took their cut along the way.
What This Really Means
This doesn’t mean a 401(k) is useless. If you have a strong employer match, low fees, and you’re disciplined, it can still be a meaningful part of your plan. But it’s not the slam dunk people make it out to be. Higher limits don’t automatically mean you’re building wealth; they just give you permission to save more dollars that are worth less.
Going forward, the trend isn’t hard to see: a weaker dollar over time, higher nominal contribution limits to keep up the illusion of progress, and a retirement system that quietly depends on workers funneling more and more of their earnings into fee generating products.
The real question isn’t how much you can contribute. It’s how much purchasing power you’ll actually get back when it’s finally time to use it.
tweet
The 401(k) Trick…Bigger Numbers, Weaker Dollars
The higher 401(k) limits look like a win. You can now save up to $24,500!…sounds empowering. But when you pair that with what’s happened to the dollar, the picture changes pretty quickly. Over the last decade plus, the currency has lost a huge chunk of its purchasing power. Between 2008 and 2025, prices rose roughly 50% in total meaning every dollar you save today buys materially less down the road. That’s why contribution limits keep rising: not because the system is generous, but because the dollar quietly buys less each year. The bars on the chart go up, but the value behind them doesn’t rise in the same way.
A $1 investment grows to $6.48 nominally, but inflation eats away about a third of that return, leaving just over $3 of real value and that’s before taxes. So when people get excited about higher limits, they’re usually thinking in nominal terms, not in terms of what those future dollars will actually afford.
Where Your Money Really Goes
Then there’s the structure of the 401(k) itself. Your contributions don’t just sit in an account; they flow into funds that charge ongoing fees. Sometimes it’s 0.3–0.5%, but it can be 1–2% depending on your plan. Those fees come out every single year, no matter how the market performs. They’re invisible, you never see a bill but they quietly siphon off a big chunk of your long term compounding.
In other words, your savings don’t just work for you. They also work for the fund companies, the plan providers, the brokers, and the managers who get paid whether your account grows in real terms or not. And the more you contribute, the bigger their slice becomes.
That’s why the whole setup feels a little backwards…the system constantly encourages you to put more in, but inflation weakens the value of those contributions, and fees skim the growth on the back end. By the time you retire, you’ve carried the inflation risk, the market risk, and the tax risk while everyone else involved took their cut along the way.
What This Really Means
This doesn’t mean a 401(k) is useless. If you have a strong employer match, low fees, and you’re disciplined, it can still be a meaningful part of your plan. But it’s not the slam dunk people make it out to be. Higher limits don’t automatically mean you’re building wealth; they just give you permission to save more dollars that are worth less.
Going forward, the trend isn’t hard to see: a weaker dollar over time, higher nominal contribution limits to keep up the illusion of progress, and a retirement system that quietly depends on workers funneling more and more of their earnings into fee generating products.
The real question isn’t how much you can contribute. It’s how much purchasing power you’ll actually get back when it’s finally time to use it.
"Americans can contribute up to $24,500 to their 401(k) in 2026—up 4% from this year’s $23,500 and 44% higher than a decade ago."
@LarryAdamRJ https://t.co/cEGJ5c8Nlt tweet
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Fiscal.ai
U.S. v. Rest of the World - Cigarette Consumption
Altria (U.S.) has seen a 36% decline in the sales of cigarettes over the last 5 years.
Philip Morris (Rest of the World) is basically flat.
$MO $PM https://t.co/IQ6hwouHwh
tweet
U.S. v. Rest of the World - Cigarette Consumption
Altria (U.S.) has seen a 36% decline in the sales of cigarettes over the last 5 years.
Philip Morris (Rest of the World) is basically flat.
$MO $PM https://t.co/IQ6hwouHwh
tweet
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EndGame Macro
When Reserves Lie: The Chart Everyone Misreads
Before 2008, we had a classic scarce reserve system. Banks ran on a small pool of reserves to clear payments and meet requirements. The Fed nudged that pool up or down to steer the overnight rate. Banks didn’t need reserves to make a loan, they created deposits when they lent but once those deposits moved through the system, they needed reserves to settle with other banks and stay solvent.
The real action, though, was always in credit risk and the yield curve. The 2 year, 10 year, mortgage rates reflected the market’s view on future growth, inflation, and Treasury supply, not the level of reserves. M2 could climb for decades because banks were willing to lend and balance sheets weren’t suffocated by post crisis regulation. Reserves were the small amount of real money keeping the plumbing clearing in the background, not the driver of broad money.
The Post GFC regime shift
After 2008, the architecture flipped. QE and the floor system turned reserves into a ring fenced asset for a narrow club of big banks. Trillions now sit on G-SIB balance sheets, earning interest at the Fed, helping them meet LCR/SLR/HQLA requirements, and cycling through the RRP/TGA machinery. They’re not there to be multiplied into new loans like the textbook money multiplier suggests.
Meanwhile, more credit intermediation migrated to non banks and global shadow systems that don’t have reserve access at all. You can 75x reserves and only see M2 roughly 3x if the real constraints are balance sheet capacity, capital rules, and risk appetite not “is another dollar of base money available?”
Collateral, the curve, and who really sets rates
In this world, Treasuries do more of the money work than reserves. They can be pledged, rehypothecated, and used by almost every balance sheet. Reserves can’t. The real scarcity isn’t a Fed liability, it’s clean collateral and the ability to warehouse it.
The Fed truly controls one thing: the overnight rate. Everything beyond that like the 2 year, the 10 year, mortgages…trades on expectations for future short rates, inflation, and heavy issuance. QE lets the Fed lean on term premia by taking duration out of the market, but it doesn’t give them lasting control of the long end. The market still gets a vote, and when deficits explode or inflation surprises, the curve can move sharply against the Fed.
QE is just an asset swap is right on narrow accounting…swapping a bond for a reserve doesn’t create new net claims. But once you add fiscal into the picture, the Treasury is issuing new net assets, and QE is changing who holds that duration and at what yield. That matters for how the curve is priced and how financial conditions evolve.
Why it feels like liquidity everywhere and nowhere
Put it together and you get a strange picture where FRED shows trillions in reserves, yet we still see repo spikes, SOFR scares, and collateral shortages. Funding can feel tight even when base money looks huge because the plumbing is misaligned. Reserves are concentrated at a few big banks, encumbered by capital rules and politics. Non banks do much of the lending and liquidity transformation but must work through bills, repo, and derivatives instead of tapping the Fed.
The system oscillates between too much and too little at the same time. You can have a glut of reserves sitting inert while dealers and non banks scramble for balance sheet room and collateral. The Fed can cut overnight rates, but if the market doesn’t buy the growth or inflation story or if issuance overwhelms dealers..the long end can tighten conditions right back up.
So just add more reserves misses the point. The real question is how reserves and Treasuries move through the system, under which constraints, and how that shapes the curve the market sets. Change those channels…capital treatment of sovereign debt, non bank access, floor system design and the whole machine behaves differently without adding a single new dollar.<code[...]
When Reserves Lie: The Chart Everyone Misreads
Before 2008, we had a classic scarce reserve system. Banks ran on a small pool of reserves to clear payments and meet requirements. The Fed nudged that pool up or down to steer the overnight rate. Banks didn’t need reserves to make a loan, they created deposits when they lent but once those deposits moved through the system, they needed reserves to settle with other banks and stay solvent.
The real action, though, was always in credit risk and the yield curve. The 2 year, 10 year, mortgage rates reflected the market’s view on future growth, inflation, and Treasury supply, not the level of reserves. M2 could climb for decades because banks were willing to lend and balance sheets weren’t suffocated by post crisis regulation. Reserves were the small amount of real money keeping the plumbing clearing in the background, not the driver of broad money.
The Post GFC regime shift
After 2008, the architecture flipped. QE and the floor system turned reserves into a ring fenced asset for a narrow club of big banks. Trillions now sit on G-SIB balance sheets, earning interest at the Fed, helping them meet LCR/SLR/HQLA requirements, and cycling through the RRP/TGA machinery. They’re not there to be multiplied into new loans like the textbook money multiplier suggests.
Meanwhile, more credit intermediation migrated to non banks and global shadow systems that don’t have reserve access at all. You can 75x reserves and only see M2 roughly 3x if the real constraints are balance sheet capacity, capital rules, and risk appetite not “is another dollar of base money available?”
Collateral, the curve, and who really sets rates
In this world, Treasuries do more of the money work than reserves. They can be pledged, rehypothecated, and used by almost every balance sheet. Reserves can’t. The real scarcity isn’t a Fed liability, it’s clean collateral and the ability to warehouse it.
The Fed truly controls one thing: the overnight rate. Everything beyond that like the 2 year, the 10 year, mortgages…trades on expectations for future short rates, inflation, and heavy issuance. QE lets the Fed lean on term premia by taking duration out of the market, but it doesn’t give them lasting control of the long end. The market still gets a vote, and when deficits explode or inflation surprises, the curve can move sharply against the Fed.
QE is just an asset swap is right on narrow accounting…swapping a bond for a reserve doesn’t create new net claims. But once you add fiscal into the picture, the Treasury is issuing new net assets, and QE is changing who holds that duration and at what yield. That matters for how the curve is priced and how financial conditions evolve.
Why it feels like liquidity everywhere and nowhere
Put it together and you get a strange picture where FRED shows trillions in reserves, yet we still see repo spikes, SOFR scares, and collateral shortages. Funding can feel tight even when base money looks huge because the plumbing is misaligned. Reserves are concentrated at a few big banks, encumbered by capital rules and politics. Non banks do much of the lending and liquidity transformation but must work through bills, repo, and derivatives instead of tapping the Fed.
The system oscillates between too much and too little at the same time. You can have a glut of reserves sitting inert while dealers and non banks scramble for balance sheet room and collateral. The Fed can cut overnight rates, but if the market doesn’t buy the growth or inflation story or if issuance overwhelms dealers..the long end can tighten conditions right back up.
So just add more reserves misses the point. The real question is how reserves and Treasuries move through the system, under which constraints, and how that shapes the curve the market sets. Change those channels…capital treatment of sovereign debt, non bank access, floor system design and the whole machine behaves differently without adding a single new dollar.<code[...]
Offshore
EndGame Macro When Reserves Lie: The Chart Everyone Misreads Before 2008, we had a classic scarce reserve system. Banks ran on a small pool of reserves to clear payments and meet requirements. The Fed nudged that pool up or down to steer the overnight rate.…
>
The amount of bank reserves has increased approx 75x since 2007
M2 has increased approx 3x since 2007
But we’re told the only problem is we don’t have enough bank reserves https://t.co/GORUNLWah8 - George Gammon tweet
The amount of bank reserves has increased approx 75x since 2007
M2 has increased approx 3x since 2007
But we’re told the only problem is we don’t have enough bank reserves https://t.co/GORUNLWah8 - George Gammon tweet
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EndGame Macro
Construction Just Blinked And the Cycle Usually Follows
Construction employment rolling over doesn’t make headlines the way payrolls or CPI do, but it’s one of those signals that tends to matter more than people realize. You can see the line bending down, and when you match that with what Home Depot and Lowe’s are saying, the story fits: big, financed projects are getting pushed out, and both pros and DIY customers are shifting to smaller, cheaper jobs. That’s what it looks like when higher rates finally seep into the real economy.
Backlogs Disguise Weakness… Until They Don’t
Construction jobs don’t fall the moment the cycle turns. Builders work through existing contracts, shift crews toward repairs or maintenance, and hope they can ride things out without losing skilled labor. Employment holds on longer than new starts, permits, or order books but once the backlog thins out, the adjustment comes quickly. The rollover you’re seeing here is usually the moment where optimism gives way to caution.
Is It a Leading or Lagging Indicator?
Housing activity (starts, permits, new home sales) is traditionally a leading piece of the cycle. Construction employment sits just behind that, not quite a first warning, but definitely not late. If you look at the chart over the past few decades, drops like this almost always show up before or right as recessions hit. What you don’t see in the historical record is construction employment turning down and the economy suddenly reaccelerating. It’s just not how this part of the system behaves.
Put simply this is one of those indicators that whispers before the rest of the data starts shouting. And right now, the whisper is getting louder.
tweet
Construction Just Blinked And the Cycle Usually Follows
Construction employment rolling over doesn’t make headlines the way payrolls or CPI do, but it’s one of those signals that tends to matter more than people realize. You can see the line bending down, and when you match that with what Home Depot and Lowe’s are saying, the story fits: big, financed projects are getting pushed out, and both pros and DIY customers are shifting to smaller, cheaper jobs. That’s what it looks like when higher rates finally seep into the real economy.
Backlogs Disguise Weakness… Until They Don’t
Construction jobs don’t fall the moment the cycle turns. Builders work through existing contracts, shift crews toward repairs or maintenance, and hope they can ride things out without losing skilled labor. Employment holds on longer than new starts, permits, or order books but once the backlog thins out, the adjustment comes quickly. The rollover you’re seeing here is usually the moment where optimism gives way to caution.
Is It a Leading or Lagging Indicator?
Housing activity (starts, permits, new home sales) is traditionally a leading piece of the cycle. Construction employment sits just behind that, not quite a first warning, but definitely not late. If you look at the chart over the past few decades, drops like this almost always show up before or right as recessions hit. What you don’t see in the historical record is construction employment turning down and the economy suddenly reaccelerating. It’s just not how this part of the system behaves.
Put simply this is one of those indicators that whispers before the rest of the data starts shouting. And right now, the whisper is getting louder.
Construction employment has been rolling over and every piece of anecdotal evidence we have suggests it’s getting worse. That typically means elevated recession risk and has never ever meant economic reacceleration: https://t.co/lSCIbxVTry tweet
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EndGame Macro
Japan Is Bracing for a Hard Transition
Japan isn’t rolling out a ¥17 trillion plus package because it suddenly rediscovered big government spending. It’s doing it because the country is in the middle of a very delicate shift, moving from a deflationary, low rate world that lasted 30 years into a higher price, higher rate environment that Japanese households simply aren’t built for.
Finance Minister Satsuki Katayama told reporters recently that the package will exceed ¥17 trillion, not just meet it. the intention is to relieve the blow of rising living costs and pour money into future growth sectors like AI and semiconductors, areas Japan can’t afford to lag in as the global economy fractures and supply chains get rewired.
In other words, this isn’t pure stimulus. It’s stabilization. Japan is trying to help households absorb higher prices without forcing the central bank to slam on the brakes, and at the same time fund the industries that must anchor its next decade.
Why This Matters Far Beyond Japan
The U.S. will be watching this closely, not out of curiosity, but because Japan is effectively running a dress rehearsal for challenges the U.S. will face in a few years.
The first thing markets will watch is the bond market. If a package this large pushes JGB yields higher, even modestly, that shifts the global flow of money. Japan is still one of the world’s biggest foreign holders of Treasuries. If returns at home start to look a little better, capital quietly migrates back and that puts pressure on the long end of the U.S. curve at a time when Washington is issuing record amounts of debt.
The second layer is the yen. For decades it’s been the world’s preferred funding currency. If Japan’s mix of fiscal spending and BOJ normalization makes the yen firmer or more volatile, the carry trade unwinds. And when that unwinds, it doesn’t just hit Japan, it tightens financial conditions everywhere. Equities feel it. Credit feels it. Anything that relies on cheap global liquidity feels it.
And then there’s the deeper, slower second order effect. If Japan pulls this off, if it can run a stimulus package greater than $110 billion, keep households afloat, and prevent its bond market from convulsing, it gives every other advanced economy with aging demographics and heavy debt a green light to push fiscal harder. It broadens the perceived safe zone for deficit spending in a world where monetary policy is no longer the main stabilizer.
That’s the real reason this matters. Japan isn’t just trying to manage its own economic transition. It’s showing the rest of the developed world what the next era of economic policy might look like and whether the global system can actually handle it.
Japan is the test case. The U.S. is the audience. And the spillover effects will tell us more about the next decade than the headline number ever will.
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Japan Is Bracing for a Hard Transition
Japan isn’t rolling out a ¥17 trillion plus package because it suddenly rediscovered big government spending. It’s doing it because the country is in the middle of a very delicate shift, moving from a deflationary, low rate world that lasted 30 years into a higher price, higher rate environment that Japanese households simply aren’t built for.
Finance Minister Satsuki Katayama told reporters recently that the package will exceed ¥17 trillion, not just meet it. the intention is to relieve the blow of rising living costs and pour money into future growth sectors like AI and semiconductors, areas Japan can’t afford to lag in as the global economy fractures and supply chains get rewired.
In other words, this isn’t pure stimulus. It’s stabilization. Japan is trying to help households absorb higher prices without forcing the central bank to slam on the brakes, and at the same time fund the industries that must anchor its next decade.
Why This Matters Far Beyond Japan
The U.S. will be watching this closely, not out of curiosity, but because Japan is effectively running a dress rehearsal for challenges the U.S. will face in a few years.
The first thing markets will watch is the bond market. If a package this large pushes JGB yields higher, even modestly, that shifts the global flow of money. Japan is still one of the world’s biggest foreign holders of Treasuries. If returns at home start to look a little better, capital quietly migrates back and that puts pressure on the long end of the U.S. curve at a time when Washington is issuing record amounts of debt.
The second layer is the yen. For decades it’s been the world’s preferred funding currency. If Japan’s mix of fiscal spending and BOJ normalization makes the yen firmer or more volatile, the carry trade unwinds. And when that unwinds, it doesn’t just hit Japan, it tightens financial conditions everywhere. Equities feel it. Credit feels it. Anything that relies on cheap global liquidity feels it.
And then there’s the deeper, slower second order effect. If Japan pulls this off, if it can run a stimulus package greater than $110 billion, keep households afloat, and prevent its bond market from convulsing, it gives every other advanced economy with aging demographics and heavy debt a green light to push fiscal harder. It broadens the perceived safe zone for deficit spending in a world where monetary policy is no longer the main stabilizer.
That’s the real reason this matters. Japan isn’t just trying to manage its own economic transition. It’s showing the rest of the developed world what the next era of economic policy might look like and whether the global system can actually handle it.
Japan is the test case. The U.S. is the audience. And the spillover effects will tell us more about the next decade than the headline number ever will.
tweet
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This is the dream chart for any freemium business model.
Duolingo has consistently improved its subscriber conversion rate (Paying Subs/MAUs) over the last 5 years.
3.3% → 8.5%
$DUOL https://t.co/cMCD7n5RkD
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This is the dream chart for any freemium business model.
Duolingo has consistently improved its subscriber conversion rate (Paying Subs/MAUs) over the last 5 years.
3.3% → 8.5%
$DUOL https://t.co/cMCD7n5RkD
tweet