Offshore
Photo
EndGame Macro
What this really shows is how sentiment toward long term Treasuries has swung over the past few years. In 2021, money was pouring in because bonds still played their old role, a steady hedge with respectable returns. Then 2022 happened. The fastest Fed hiking cycle in decades crushed duration, and investors bailed. That dip in the middle is basically everyone saying that they were done with long bonds.
But once you get past that washout, you can see the mood shift. As inflation cooled and yields stayed high, the math started to look too good to ignore. 4% to 5% on safe assets is hard to beat, especially when the equity market feels top heavy and growth looks less certain. Pension funds, insurers, and even retail started coming back because locking in those yields feels like buying time.
There’s also a supply story under the hood. Treasury has leaned more on bills this year, which quietly took some pressure off the long end. Less long duration issuance plus better valuations is enough to pull people back in, even with the political noise and deficit headlines.
So the chart isn’t just about inflows. It’s about a market that spent a year swearing off duration, only to realize it needed it again. And once that realization sets in, the buying tends to build on itself…slowly at first, and then all at once.
tweet
What this really shows is how sentiment toward long term Treasuries has swung over the past few years. In 2021, money was pouring in because bonds still played their old role, a steady hedge with respectable returns. Then 2022 happened. The fastest Fed hiking cycle in decades crushed duration, and investors bailed. That dip in the middle is basically everyone saying that they were done with long bonds.
But once you get past that washout, you can see the mood shift. As inflation cooled and yields stayed high, the math started to look too good to ignore. 4% to 5% on safe assets is hard to beat, especially when the equity market feels top heavy and growth looks less certain. Pension funds, insurers, and even retail started coming back because locking in those yields feels like buying time.
There’s also a supply story under the hood. Treasury has leaned more on bills this year, which quietly took some pressure off the long end. Less long duration issuance plus better valuations is enough to pull people back in, even with the political noise and deficit headlines.
So the chart isn’t just about inflows. It’s about a market that spent a year swearing off duration, only to realize it needed it again. And once that realization sets in, the buying tends to build on itself…slowly at first, and then all at once.
Treasury market is a top performing DM market despite big deficits, political uncertainty, and threats to Fed independence. This post reviews the sources of investor demand and shifts by Treasury that supported the market. It looks like it can continue.
https://t.co/NqPBikHdFB tweet
Offshore
Photo
EndGame Macro
The Refi Freeze: Where the First Cracks in the Consumer Are Starting to Show
The blue line…refi applications is basically on the floor. That’s not a mystery. Anyone who could lock in a cheap mortgage already did it in 2020–21. Everyone else is staring at today’s rates and saying, “Why bother?” So the only people still trying to refinance now are the ones who need to, not the ones who want to.
The red line…the rejection rate tells the real story. Almost half of those applications are getting denied. That’s not normal. And it’s not happening because people suddenly forgot how to fill out forms. It’s happening because the folks applying are the ones under financial pressure, the ones whose credit profiles have slipped, the ones hoping a refi will buy them breathing room. In other words, the marginal borrower.
Banks Are Quietly Tightening the Screws
On the lender side, the mood has changed too. Funding costs are higher, regulators are tougher, and delinquencies are creeping up in other parts of consumer credit. When banks see that mix, they don’t just raise rates, they pull back. They tighten standards. They tell borderline applicants “not right now,” even if those people would’ve been approved two or three years ago.
Put those two forces together and you get exactly what you’re seeing:
•hardly anyone is applying,
•and the ones who do are getting shut out at record levels.
The Bigger Message
The headline number is just the surface. The deeper message is that the credit channel is starting to bite. Not broadly, not dramatically but in the exact places where household stress tends to show up first. These are the people who eventually show up in delinquency data, in forced sales, in consumer spending cuts. And when enough of that pressure builds, it spills over into the wider economy.
You don’t need a crisis to feel the squeeze. Sometimes it starts with charts like this…quiet, early, and concentrated at the edges.
tweet
The Refi Freeze: Where the First Cracks in the Consumer Are Starting to Show
The blue line…refi applications is basically on the floor. That’s not a mystery. Anyone who could lock in a cheap mortgage already did it in 2020–21. Everyone else is staring at today’s rates and saying, “Why bother?” So the only people still trying to refinance now are the ones who need to, not the ones who want to.
The red line…the rejection rate tells the real story. Almost half of those applications are getting denied. That’s not normal. And it’s not happening because people suddenly forgot how to fill out forms. It’s happening because the folks applying are the ones under financial pressure, the ones whose credit profiles have slipped, the ones hoping a refi will buy them breathing room. In other words, the marginal borrower.
Banks Are Quietly Tightening the Screws
On the lender side, the mood has changed too. Funding costs are higher, regulators are tougher, and delinquencies are creeping up in other parts of consumer credit. When banks see that mix, they don’t just raise rates, they pull back. They tighten standards. They tell borderline applicants “not right now,” even if those people would’ve been approved two or three years ago.
Put those two forces together and you get exactly what you’re seeing:
•hardly anyone is applying,
•and the ones who do are getting shut out at record levels.
The Bigger Message
The headline number is just the surface. The deeper message is that the credit channel is starting to bite. Not broadly, not dramatically but in the exact places where household stress tends to show up first. These are the people who eventually show up in delinquency data, in forced sales, in consumer spending cuts. And when enough of that pressure builds, it spills over into the wider economy.
You don’t need a crisis to feel the squeeze. Sometimes it starts with charts like this…quiet, early, and concentrated at the edges.
Hot off @NYFedResearch SCE presses:
"Overall rejection rate for any kind of credit over past 12 months increased to 24.8% from June's 23.1% a new series high. Rejection rates increased for home loans, car loans & mortgage refinancing"
On refinancing, rejections hit record 45.7% tweet
Offshore
Photo
EndGame Macro
Japan’s Great Repricing: The Moment the World’s Safest Bond Market Finally Woke Up
This is what happens when a country that spent 30 years in a deflationary deep freeze suddenly has to live in a world with real inflation, higher global rates, and a weak currency. For decades, the long end of Japan’s curve barely moved. You could go years without seeing a meaningful shift. Now the 20 year is ripping higher because the market is finally treating Japan like a normal developed economy again…one with large deficits, an aging population, and a currency that keeps sliding.
Why It’s Happening
Inflation may not be runaway, but it’s been above the BOJ’s target long enough that the old playbook doesn’t work. The BOJ already scrapped negative rates, loosened yield curve control, and hinted at more normalization. Once you crack the door open, investors stop anchoring to 0.5% or 1% ceilings. They start asking what Japanese rates should look like if the country is going to run stimulus packages, import more inflation through the yen, and rely heavily on debt to support households.
Add in the ¥17 trillion stimulus package the government is preparing…tax cuts, subsidies, support for households and bond investors immediately see more supply and more inflation risk. That combination almost always pushes the long end higher.
What It Signals Going Forward
This move in JGBs is the market telling us that Japan’s multi decade regime of safe, static, predictable yields is fading. If Japanese savers can suddenly earn 2–3% at home, some of the money that used to flow into U.S. Treasuries, European bonds, or EM carry trades doesn’t need to go abroad. That’s a quiet shift, but it matters for global liquidity…Japan has been one of the world’s biggest sources of external capital for years.
Domestically, higher yields eventually feed back into Japan’s government budget. With that much debt outstanding, every incremental rise in long rates tightens the screws. At some point the BOJ will have to decide how much of this normalization it’s actually willing to tolerate.
So the chart is the bond market rewriting Japan’s story. A country that lived on deflation, cheap money, and a strong yen now has inflation pressure, stimulus spending, and a currency at a 35 year low. The market is simply adjusting to that reality.
tweet
Japan’s Great Repricing: The Moment the World’s Safest Bond Market Finally Woke Up
This is what happens when a country that spent 30 years in a deflationary deep freeze suddenly has to live in a world with real inflation, higher global rates, and a weak currency. For decades, the long end of Japan’s curve barely moved. You could go years without seeing a meaningful shift. Now the 20 year is ripping higher because the market is finally treating Japan like a normal developed economy again…one with large deficits, an aging population, and a currency that keeps sliding.
Why It’s Happening
Inflation may not be runaway, but it’s been above the BOJ’s target long enough that the old playbook doesn’t work. The BOJ already scrapped negative rates, loosened yield curve control, and hinted at more normalization. Once you crack the door open, investors stop anchoring to 0.5% or 1% ceilings. They start asking what Japanese rates should look like if the country is going to run stimulus packages, import more inflation through the yen, and rely heavily on debt to support households.
Add in the ¥17 trillion stimulus package the government is preparing…tax cuts, subsidies, support for households and bond investors immediately see more supply and more inflation risk. That combination almost always pushes the long end higher.
What It Signals Going Forward
This move in JGBs is the market telling us that Japan’s multi decade regime of safe, static, predictable yields is fading. If Japanese savers can suddenly earn 2–3% at home, some of the money that used to flow into U.S. Treasuries, European bonds, or EM carry trades doesn’t need to go abroad. That’s a quiet shift, but it matters for global liquidity…Japan has been one of the world’s biggest sources of external capital for years.
Domestically, higher yields eventually feed back into Japan’s government budget. With that much debt outstanding, every incremental rise in long rates tightens the screws. At some point the BOJ will have to decide how much of this normalization it’s actually willing to tolerate.
So the chart is the bond market rewriting Japan’s story. A country that lived on deflation, cheap money, and a strong yen now has inflation pressure, stimulus spending, and a currency at a 35 year low. The market is simply adjusting to that reality.
JUST IN 🚨: Japan's 20-Year Bond Yield jumps to highest level since 1999 📈 tweet
Offshore
Photo
Fiscal.ai
Legendary fund manager Chris Hohn bought 9 million shares of Visa in Q3, increasing his stake by 47%.
That's his largest purchase of Visa in more than 5 years.
$V https://t.co/kjuTPuK4bx
tweet
Legendary fund manager Chris Hohn bought 9 million shares of Visa in Q3, increasing his stake by 47%.
That's his largest purchase of Visa in more than 5 years.
$V https://t.co/kjuTPuK4bx
tweet
EndGame Macro
Excellent. Everyone should watch this.
tweet
Excellent. Everyone should watch this.
Fed Starting QE SOON!! (Here's Why) https://t.co/QMzSKeugH0 tweet
X (formerly Twitter)
George Gammon (@GeorgeGammon) on X
Fed Starting QE SOON!! (Here's Why) https://t.co/QMzSKeugH0
EndGame Macro
Under the Hood: Jefferson Shows the Fed Is More Worried About Jobs Than Prices
If you peel back the polite language, Jefferson is trying to nudge everyone toward a simple idea…the inflation fight is no longer the center of gravity. The real risk now is the job market starting to sag at the edges. He basically says growth was doing fine before the shutdown, the temporary hit from furloughs and delayed payments will wash out, and the labor market is cooling just enough that unemployment will drift higher from here.
And on inflation, he goes out of his way to frame the recent stall as tariff related. In his view, this isn’t a new wave of sticky, structural inflation. It’s a one time price bump that will pass once inventories adjust. Expectations are still anchored, and that’s what matters to them.
When you put all of that together, he’s laying the groundwork to argue that the Fed should be more worried about slowing demand and job losses than the last bit of inflation progress. That’s why last month’s 25 bps cut makes sense in his eyes, not because they won, but because the risks have flipped. Keeping policy too tight into a softening labor market is the mistake he wants to avoid.
The Quiet Part: Ending QT
The more interesting part is what he doesn’t dramatize. Ending QT. He spends a few sentences on rising repo rates, heavier use of the standing repo facility, and the fed funds rate drifting above IORB, all signs the system was running out of reserves. That’s the same pattern that preceded the 2019 funding blow up.
So instead of waiting for a stress event, they pulled the plug early and froze the balance sheet. He phrases it cautiously, but that’s a meaningful easing step. When a central bank is worried about reserve scarcity, it tells you they’re no longer trying to drain liquidity, they’re trying to protect the plumbing.
What Comes Next
Put it all together and the tone of the speech shifts. This is a Fed shifting into risk management mode. They’re willing to look past tariff noise. They’re increasingly uneasy about labor market softening. They’re done draining reserves. And they’re inching policy toward neutral rather than holding the line at “restrictive.”
If anything, the next surprise is more likely to be the Fed easing faster than markets currently assume, not suddenly turning hawkish again. The speech may sound calm, but the direction he’s pointing is clear…inflation isn’t the threat anymore, the downside risks are. This is the type of setup where cuts come earlier and more decisively than people expect.
tweet
Under the Hood: Jefferson Shows the Fed Is More Worried About Jobs Than Prices
If you peel back the polite language, Jefferson is trying to nudge everyone toward a simple idea…the inflation fight is no longer the center of gravity. The real risk now is the job market starting to sag at the edges. He basically says growth was doing fine before the shutdown, the temporary hit from furloughs and delayed payments will wash out, and the labor market is cooling just enough that unemployment will drift higher from here.
And on inflation, he goes out of his way to frame the recent stall as tariff related. In his view, this isn’t a new wave of sticky, structural inflation. It’s a one time price bump that will pass once inventories adjust. Expectations are still anchored, and that’s what matters to them.
When you put all of that together, he’s laying the groundwork to argue that the Fed should be more worried about slowing demand and job losses than the last bit of inflation progress. That’s why last month’s 25 bps cut makes sense in his eyes, not because they won, but because the risks have flipped. Keeping policy too tight into a softening labor market is the mistake he wants to avoid.
The Quiet Part: Ending QT
The more interesting part is what he doesn’t dramatize. Ending QT. He spends a few sentences on rising repo rates, heavier use of the standing repo facility, and the fed funds rate drifting above IORB, all signs the system was running out of reserves. That’s the same pattern that preceded the 2019 funding blow up.
So instead of waiting for a stress event, they pulled the plug early and froze the balance sheet. He phrases it cautiously, but that’s a meaningful easing step. When a central bank is worried about reserve scarcity, it tells you they’re no longer trying to drain liquidity, they’re trying to protect the plumbing.
What Comes Next
Put it all together and the tone of the speech shifts. This is a Fed shifting into risk management mode. They’re willing to look past tariff noise. They’re increasingly uneasy about labor market softening. They’re done draining reserves. And they’re inching policy toward neutral rather than holding the line at “restrictive.”
If anything, the next surprise is more likely to be the Fed easing faster than markets currently assume, not suddenly turning hawkish again. The speech may sound calm, but the direction he’s pointing is clear…inflation isn’t the threat anymore, the downside risks are. This is the type of setup where cuts come earlier and more decisively than people expect.
Speech by Vice Chair Jefferson on the economic outlook and monetary policy @KansasCityFed: https://t.co/8gzRux486K
Learn more about Vice Chair Jefferson: https://t.co/oUzpfyg7jd tweet
X (formerly Twitter)
Federal Reserve (@federalreserve) on X
Speech by Vice Chair Jefferson on the economic outlook and monetary policy @KansasCityFed: https://t.co/8gzRux486K
Learn more about Vice Chair Jefferson: https://t.co/oUzpfyg7jd
Learn more about Vice Chair Jefferson: https://t.co/oUzpfyg7jd
Offshore
Photo
AkhenOsiris
$CRWV $NVDA $MSFT OAI
Yikes 😬
Naturally, I asked CoreWeave how they planned to compete, if necessary, with these customers who are also building their own data centers. I am going to give you the written response verbatim:
“We have long-standing, multi-contract relationships with these customers and are deeply integrated with their teams. While some may build their own clusters, they continue to see tremendous value in the best-in-class performance and expertise.”
“This build-out of AI infrastructure is historic in size, and it is not a zero sum game. It will require many providers, working together, to unleash AI’s true promise and potential.”
Astute readers will notice that this does not answer my question. The dodge suggests to me that CoreWeave doesn’t actually have a good answer.
https://t.co/NLTTQOSJY4
tweet
$CRWV $NVDA $MSFT OAI
Yikes 😬
Naturally, I asked CoreWeave how they planned to compete, if necessary, with these customers who are also building their own data centers. I am going to give you the written response verbatim:
“We have long-standing, multi-contract relationships with these customers and are deeply integrated with their teams. While some may build their own clusters, they continue to see tremendous value in the best-in-class performance and expertise.”
“This build-out of AI infrastructure is historic in size, and it is not a zero sum game. It will require many providers, working together, to unleash AI’s true promise and potential.”
Astute readers will notice that this does not answer my question. The dodge suggests to me that CoreWeave doesn’t actually have a good answer.
https://t.co/NLTTQOSJY4
tweet
Offshore
Video
Fiscal.ai
RT @BradoCapital: Officially launching next week 👀
For Canadian stocks and ADRs, the same features that are available now for US stocks.
Which means:
Data instantly available after earnings
Click-thru to source filing (as demo'd here)
As reported vs. standardized financials
Adjusted financials
Longer data history (20 years)
tweet
RT @BradoCapital: Officially launching next week 👀
For Canadian stocks and ADRs, the same features that are available now for US stocks.
Which means:
Data instantly available after earnings
Click-thru to source filing (as demo'd here)
As reported vs. standardized financials
Adjusted financials
Longer data history (20 years)
tweet
Offshore
Video
EndGame Macro
The Empire State Manufacturing Report: A Strong Headline Hiding a Weak Foundation
At first glance, the Empire State report looks like something you’d want to cheer. Business conditions jump to 18.7, the strongest print since last November. New orders and shipments rise sharply. Inventories finally move out of negative territory. If you’re only watching the headline number, it feels like manufacturing is catching a second wind.
But once you actually look inside the report, the story gets a lot more complicated and honestly, a lot less healthy than the headline suggests.
Activity Is Up, But the Underlying Pulse Still Looks Weak
The bounce in activity is real, but look at what’s happening underneath:
•Unfilled orders fall again to -5.8, meaning firms are working down backlogs rather than building new business. That’s not a sign of robust, broad based demand. It’s a sign that things got quiet, and now firms are catching up.
•Supply availability worsens, slipping further to -11.5. Even with demand improving, it’s still harder to get inputs. That’s not what a smooth, confident recovery looks like, it’s what late cycle strain looks like.
In a real expansion, orders rise, backlogs rise, and supply eases. Here, orders rise but backlogs shrink and supply chains tighten. That’s not strength, that’s friction.
Pricing Pressure Isn’t Easing the Way It Should
This is the part nobody wants to talk about.
•Prices paid: 49.0
•Prices received: 24.0
Both cooled slightly, but they’re still elevated after two years of supposed normalization. And when you flip to forward looking expectations firms still expect:
•Prices paid to stay extremely high (62.5)
•Prices received to rise further (41.3)
This isn’t an economy gliding back to 2% inflation. It’s an economy where firms still assume costs will rise and they’ll be able to pass a chunk of that through.
The Labor Market Lift Is Real… but Small
Employment did tick up to 6.6, and the average workweek jumped to 7.7, a multi year high.
But zoom into the distribution on the same page:
•Only 13.8% of firms are hiring
•7.2% are cutting
•The majority are doing nothing
This is not broad based hiring. It’s mild relief after a soft patch, not the beginning of a strong labor resurgence. And again, that lines up with a late cycle pattern: firms stretch hours first before committing to new hires.
The Most Telling Signal: Optimism Falls
Here’s the part that flips the whole narrative: the future expectations index falls hard from 30.3 to 19.1 even as current activity improves.
That is exactly what you see when businesses enjoy a brief uptick but don’t trust it to last.
•Orders today? Up.
•Outlook six months from now? Down.
It’s the economic equivalent of smiling at the moment but glancing over your shoulder.
Why This Isn’t the “Everything Is Fine” Print People Want
If you put all of it together…rising activity, shrinking backlogs, input constraints, elevated pricing pressure, cautious hiring, and a sharp drop in optimism the picture becomes much clearer:
This is a late cycle relief bounce, not a sign that the economy is gaining real momentum.
It’s the kind of report you get when things aren’t falling apart, but they’re not strengthening either. Firms are busier than they were a few months ago, but they’re also more uncertain, more squeezed, and more constrained.
The cheerleaders will focus on the 18.7 headline. Anyone who actually reads the survey will see the real message.
The economy is wobbling forward with just enough energy to disguise the fact that the underlying supports are getting thinner.
The November Empire State Manufacturing Survey indicates that manufacturing activity grew at a solid pace in New York State. The headline general business conditions index climbed eight points to 18.7, its highest reading in a year.
https://t.co/psUPHT8E8l https://t.co/Kk83Y82zOu - New York Fed Research tweet
The Empire State Manufacturing Report: A Strong Headline Hiding a Weak Foundation
At first glance, the Empire State report looks like something you’d want to cheer. Business conditions jump to 18.7, the strongest print since last November. New orders and shipments rise sharply. Inventories finally move out of negative territory. If you’re only watching the headline number, it feels like manufacturing is catching a second wind.
But once you actually look inside the report, the story gets a lot more complicated and honestly, a lot less healthy than the headline suggests.
Activity Is Up, But the Underlying Pulse Still Looks Weak
The bounce in activity is real, but look at what’s happening underneath:
•Unfilled orders fall again to -5.8, meaning firms are working down backlogs rather than building new business. That’s not a sign of robust, broad based demand. It’s a sign that things got quiet, and now firms are catching up.
•Supply availability worsens, slipping further to -11.5. Even with demand improving, it’s still harder to get inputs. That’s not what a smooth, confident recovery looks like, it’s what late cycle strain looks like.
In a real expansion, orders rise, backlogs rise, and supply eases. Here, orders rise but backlogs shrink and supply chains tighten. That’s not strength, that’s friction.
Pricing Pressure Isn’t Easing the Way It Should
This is the part nobody wants to talk about.
•Prices paid: 49.0
•Prices received: 24.0
Both cooled slightly, but they’re still elevated after two years of supposed normalization. And when you flip to forward looking expectations firms still expect:
•Prices paid to stay extremely high (62.5)
•Prices received to rise further (41.3)
This isn’t an economy gliding back to 2% inflation. It’s an economy where firms still assume costs will rise and they’ll be able to pass a chunk of that through.
The Labor Market Lift Is Real… but Small
Employment did tick up to 6.6, and the average workweek jumped to 7.7, a multi year high.
But zoom into the distribution on the same page:
•Only 13.8% of firms are hiring
•7.2% are cutting
•The majority are doing nothing
This is not broad based hiring. It’s mild relief after a soft patch, not the beginning of a strong labor resurgence. And again, that lines up with a late cycle pattern: firms stretch hours first before committing to new hires.
The Most Telling Signal: Optimism Falls
Here’s the part that flips the whole narrative: the future expectations index falls hard from 30.3 to 19.1 even as current activity improves.
That is exactly what you see when businesses enjoy a brief uptick but don’t trust it to last.
•Orders today? Up.
•Outlook six months from now? Down.
It’s the economic equivalent of smiling at the moment but glancing over your shoulder.
Why This Isn’t the “Everything Is Fine” Print People Want
If you put all of it together…rising activity, shrinking backlogs, input constraints, elevated pricing pressure, cautious hiring, and a sharp drop in optimism the picture becomes much clearer:
This is a late cycle relief bounce, not a sign that the economy is gaining real momentum.
It’s the kind of report you get when things aren’t falling apart, but they’re not strengthening either. Firms are busier than they were a few months ago, but they’re also more uncertain, more squeezed, and more constrained.
The cheerleaders will focus on the 18.7 headline. Anyone who actually reads the survey will see the real message.
The economy is wobbling forward with just enough energy to disguise the fact that the underlying supports are getting thinner.
The November Empire State Manufacturing Survey indicates that manufacturing activity grew at a solid pace in New York State. The headline general business conditions index climbed eight points to 18.7, its highest reading in a year.
https://t.co/psUPHT8E8l https://t.co/Kk83Y82zOu - New York Fed Research tweet