Offshore
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EndGame Macro
The Market Just Told the Fed That They’re Out of Time
The jump from 28% to 71% odds of a December rate cut is the market admitting the slowdown is becoming too obvious to ignore. When cut probabilities move that sharply in a single day, it’s never about one number. It’s about the direction the data is moving…labor softening, cracks in spending, credit tightening, and a tone from the Fed that suddenly feels a little less confident.
Markets don’t behave like this when things are stable. They behave like this when they sense the Fed is losing the luxury of patience.
A Rate Cut Isn’t the Fix People Think It Is
Even if the Fed cuts and the odds now say that’s increasingly likely it won’t solve what’s happening beneath the surface. Cuts this late in the cycle are almost always reactive. They happen because the slowdown is already pressing in, not because the Fed wants to juice growth or save markets.
A 25bp cut doesn’t make banks lend again.
It doesn’t reverse rising delinquencies.
It doesn’t revive margins or undo two years of rate pressure on households and small businesses.
Cuts don’t turn a deteriorating economy into a healthy one. They simply acknowledge that the deterioration is real.
What the Fed Says vs. What the Fed Is Managing
The Fed has to speak in a certain tone. They need to sound measured, in control, focused on inflation, focused on credibility. But anyone who watches them closely knows that the public script is never the full story.
Behind the curtain, they’re juggling things they can’t say out loud…geopolitical pressure, global dollar funding, fiscal stress, the softening in labor, and the slow grind of higher rates filtering through the real economy. Inflation was their headline concern, but forward looking inflation isn’t the constraint anymore…growth is.
That’s why ending QT on December 1st matters. That’s why two straight cuts matter. Those are big moves dressed up in calm language. Ending QT is the balance sheet version of easing. You don’t hit the brakes on tightening unless you’re worried the financial system or the economy is getting brittle.
The Fed may not want to cut in December, but the market is signaling that they may not have the option.
Where This Really Leaves Us
The Fed would love to engineer a clean landing. They’d like inflation to drift gently lower, hiring to stay soft but stable, and the economy to cool without actually slowing. But the data isn’t cooperating. The landing is wobbling. And once the underlying economy weakens enough, cuts aren’t a choice they’re the path of least regret. A cut won’t save the cycle. It will simply mark the moment the Fed stops pretending the old script still fits.
tweet
The Market Just Told the Fed That They’re Out of Time
The jump from 28% to 71% odds of a December rate cut is the market admitting the slowdown is becoming too obvious to ignore. When cut probabilities move that sharply in a single day, it’s never about one number. It’s about the direction the data is moving…labor softening, cracks in spending, credit tightening, and a tone from the Fed that suddenly feels a little less confident.
Markets don’t behave like this when things are stable. They behave like this when they sense the Fed is losing the luxury of patience.
A Rate Cut Isn’t the Fix People Think It Is
Even if the Fed cuts and the odds now say that’s increasingly likely it won’t solve what’s happening beneath the surface. Cuts this late in the cycle are almost always reactive. They happen because the slowdown is already pressing in, not because the Fed wants to juice growth or save markets.
A 25bp cut doesn’t make banks lend again.
It doesn’t reverse rising delinquencies.
It doesn’t revive margins or undo two years of rate pressure on households and small businesses.
Cuts don’t turn a deteriorating economy into a healthy one. They simply acknowledge that the deterioration is real.
What the Fed Says vs. What the Fed Is Managing
The Fed has to speak in a certain tone. They need to sound measured, in control, focused on inflation, focused on credibility. But anyone who watches them closely knows that the public script is never the full story.
Behind the curtain, they’re juggling things they can’t say out loud…geopolitical pressure, global dollar funding, fiscal stress, the softening in labor, and the slow grind of higher rates filtering through the real economy. Inflation was their headline concern, but forward looking inflation isn’t the constraint anymore…growth is.
That’s why ending QT on December 1st matters. That’s why two straight cuts matter. Those are big moves dressed up in calm language. Ending QT is the balance sheet version of easing. You don’t hit the brakes on tightening unless you’re worried the financial system or the economy is getting brittle.
The Fed may not want to cut in December, but the market is signaling that they may not have the option.
Where This Really Leaves Us
The Fed would love to engineer a clean landing. They’d like inflation to drift gently lower, hiring to stay soft but stable, and the economy to cool without actually slowing. But the data isn’t cooperating. The landing is wobbling. And once the underlying economy weakens enough, cuts aren’t a choice they’re the path of least regret. A cut won’t save the cycle. It will simply mark the moment the Fed stops pretending the old script still fits.
What a difference a day (and a comment from Williams on FOMC) makes … pre-jobs report yesterday, odds for a Dec rate cut were 28% … now at 71%
@CMEGroup https://t.co/VXycxK0Cjg tweet
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Clark Square Capital
Great pitch on Tonies $TNIE
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Great pitch on Tonies $TNIE
Didn’t post anything from my book for a while, so here’s one I’m excited about. Long-form tweet incoming.
$TNIE Tonies is a phenomenal business hiding behind a product that, if you’ve never seen it, looks almost nonsensical. You open the filings, see >30x FY24 EBITDA, and your first reaction is: what the hell is this and why is this so expensive.
If you have kids and live in DACH, you already know the answer. Penetration is roughly 50%. The product is everywhere. And the US rollout is accelerating fast.
The Toniebox is a screen-free entertainment and learning device kids intuitively understand from day one. They’ve built a massive library of IP (both owned and licensed) with every relevant brand: Paw Patrol, Peppa Pig, Lion King, Toy Story, Ms. Rachel and endless others. The value prop is obvious to any parent, and the network effect of content + hardware is working well.
Top-line CAGR over the last 5 years is north of 35%. With the Toniebox 2 launching and international penetration still very early (especially the US, which is already huge but nowhere near saturated), the runway just got longer. Management guides for >25% revenue growth in 2025. The “>” matters. My base case is closer to 35%.
It’s also a textbook razor/razorblade model. They probably barely make money on the box, but over 5 years they sell up to 20 figurines per household on average, at high gross margins. As penetration deepens, mix shifts toward “razorblades” (i.e. Tonies), and margins scale. You can already see it: 2024 adj. EBITDA margin was 7.5%. 2022 and earlier was always loss-making. The Toniebox 2 launch will mute 2025 margin expansion, but structurally, margins trend up as new markets mature. DACH is the proof. With >50% penetration, EBITDA margins approach 25%. Once the US and ROW climb the curve, consolidated margins follow.
From the outside, the valuation and margin profile look odd. From the inside, meaning actually understanding the product, how kids use it and how the model monetizes over time, it’s logic. Execution has been top notch for years. They hit their numbers. They scale efficiently. They keep expanding the IP universe.
I do not think that this is a cute toy fad. To me, it seems more like a durable, subscription-like physical media ecosystem.
There is so much more to say, and as always, there are many risks attached to this and DYODD. I might write a longer form post on the blog over the coming weeks.
Disclosure: Long, c. 12% of NAV, avg. entry of EUR 5.90.
Bonus for hip-hop aficionados like me: Snoop just dropped a Doggyland Tonie. Nuff said. tweet
Offshore
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EndGame Macro
Play the Game That Fits Your Life
In moments like this, people get pulled in a hundred different directions. Every influencer, every chart guy, every “this is the moment” account is shouting their version of reality. But none of those people live your life. None of them carry your responsibilities. None of them pay your bills or take care of your family.
So the focus has to shift from what the market wants from you to what actually makes sense for you.
Some people really can stomach heavy volatility. They have stable income, low debt, long time horizons, and enough cushion to absorb a bad year or two without it changing their day to day life. For them, a drawdown is annoying, not dangerous.
But others aren’t in that position, and that’s where trouble creeps in. When someone’s stretched thin and hoping that one speculative position is going to fix everything, it’s easy to override common sense and cling to whatever narrative feels comforting. That’s when risk turns into stress, and stress turns into damage.
The question everyone should be asking right now is incredibly simple…If this went to zero tomorrow, would I still be okay? Would the people who depend on me still be okay?
If your answer is yes, that’s great. You’re playing with capital that can survive a beating. If your answer even hesitates, your gut is already telling you the truth your mind doesn’t want to say out loud.
Markets don’t care about our hopes. They don’t reward bravery. They reward discipline, patience, and not putting yourself in a position where one bad week can wreck your real life.
This isn’t financial advice, just some perspective from someone who’s seen what happens when people ignore their own instincts in moments like this.
tweet
Play the Game That Fits Your Life
In moments like this, people get pulled in a hundred different directions. Every influencer, every chart guy, every “this is the moment” account is shouting their version of reality. But none of those people live your life. None of them carry your responsibilities. None of them pay your bills or take care of your family.
So the focus has to shift from what the market wants from you to what actually makes sense for you.
Some people really can stomach heavy volatility. They have stable income, low debt, long time horizons, and enough cushion to absorb a bad year or two without it changing their day to day life. For them, a drawdown is annoying, not dangerous.
But others aren’t in that position, and that’s where trouble creeps in. When someone’s stretched thin and hoping that one speculative position is going to fix everything, it’s easy to override common sense and cling to whatever narrative feels comforting. That’s when risk turns into stress, and stress turns into damage.
The question everyone should be asking right now is incredibly simple…If this went to zero tomorrow, would I still be okay? Would the people who depend on me still be okay?
If your answer is yes, that’s great. You’re playing with capital that can survive a beating. If your answer even hesitates, your gut is already telling you the truth your mind doesn’t want to say out loud.
Markets don’t care about our hopes. They don’t reward bravery. They reward discipline, patience, and not putting yourself in a position where one bad week can wreck your real life.
This isn’t financial advice, just some perspective from someone who’s seen what happens when people ignore their own instincts in moments like this.
tweet
Offshore
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WealthyReadings
I am still a buyer for a few handful reasons.
1. I believe the FED needs to continue to cut rates, and will in December.
https://t.co/5joU9HUnh1
2. I believe in AI and that $NVDA isn't a fraud, and the data backs me up.
https://t.co/jvzeGM3kwY
3. $TMDX is more than 30% of my portfolio, a recession and AI proof business unaffected by rate cuts, so even if the rest of the market falls liquidity should go towards those kinds of assets.
https://t.co/5ZqknmvPVz
4. Fiscal spending isn't and will not slow down during the next years and the only protection against this is assets, and this is also why I dobuled my $BTC weekly DCA.
That being said, the market is taking a hit and it won't recover from this in a few days with a V shape recovery like post liberation day as we do not have comparable catalysts before EOY.
So I am being prudent and slow in my purchases. There is no rush in today's market, you don't need to catch falling knifes, you just need to wait and be patient.
The few percentage point won by catching a bottom compared to following a trend aren't worth the risk.
🚨BREAKING: The $610 Billion AI Ponzi Scheme Is Not A Ponzi Scheme
Here’s why $NVDA isn’t the disaster the algorithms - and the bears, want you to think it is. Far from it.
Shanaka’s argument claims that Nvidia’s rising inventory, receivables, and DSO suggest demand is slowing and the company is pushing more product than customers can absorb, in terms of need and payment.
In brief: no more demand nor cash to pay for their GPUs.
1. Rising Inventory ≠ Red Flag
Shanaka says rising inventory is evidence of weak demand, but ignores $NVDA pricing - and many other factors we'll talk about.
When unit prices double or triple, the same volume of hardware shows up as a larger dollar value in inventories.
You'll have more bananas for $1M that airplanes, right? Just like you'll have more H100 than GB200.
When we normalize inventory by revenue - or by units shipped, the trend is stable, suggesting this is a pricing effect, not a demand problem and rising inventory in volume.
This can also be illustrated with accounts receivable per revenue, which make the same point: when product prices increase, dollar-denominated metrics rise, so metrics taken individually may look bad but within context, the story looks normal.
That being said, many could point that even then, inventory is rising. To which we need to add context, something algorythms are incapable of.
2. Higher DSO & Supply Chain Constraints
DSO - which represents the time before being paid, rising slightly is consistent with real-world constraints.
$NVDA doesn’t just ship GPUs anymore; they ship racks, custom configurations, integrated systems… These use third-party components, which require more coordination, harder logistics, and can temporarily increase time before revenue recognition and therefore inventory.
Add to this the fact that foundries, as proven many times these quarters during $TSM & co earnings, run at full capacity, and you get even more delays.
More customization + constrained supply chains = longer installation cycles before revenue can be recognized and rising inventories until then.
This is an operational bottleneck, not a credit problem.
A move from 46 to 53 days is marginal especially considering this value has been roughly stable for three quarters.
3. Circular Economy
As for the claims about a circular economy and the same dollars being used across multiple companies, I have no counters but this: circular economies are normal, that’s how economies work.
It only becomes a problem if AI services do not generate enough cash to honor commitments.
Because that’s what those are: commitments, not booked revenues. If those commitments can be honored, then what is the problem?
4. Algorithms Don’t Understand Context
Shanaka claims that this was thankfully found by algorithm - and I can agree with him based on the market's behaviour an[...]
I am still a buyer for a few handful reasons.
1. I believe the FED needs to continue to cut rates, and will in December.
https://t.co/5joU9HUnh1
2. I believe in AI and that $NVDA isn't a fraud, and the data backs me up.
https://t.co/jvzeGM3kwY
3. $TMDX is more than 30% of my portfolio, a recession and AI proof business unaffected by rate cuts, so even if the rest of the market falls liquidity should go towards those kinds of assets.
https://t.co/5ZqknmvPVz
4. Fiscal spending isn't and will not slow down during the next years and the only protection against this is assets, and this is also why I dobuled my $BTC weekly DCA.
That being said, the market is taking a hit and it won't recover from this in a few days with a V shape recovery like post liberation day as we do not have comparable catalysts before EOY.
So I am being prudent and slow in my purchases. There is no rush in today's market, you don't need to catch falling knifes, you just need to wait and be patient.
The few percentage point won by catching a bottom compared to following a trend aren't worth the risk.
🚨BREAKING: The $610 Billion AI Ponzi Scheme Is Not A Ponzi Scheme
Here’s why $NVDA isn’t the disaster the algorithms - and the bears, want you to think it is. Far from it.
Shanaka’s argument claims that Nvidia’s rising inventory, receivables, and DSO suggest demand is slowing and the company is pushing more product than customers can absorb, in terms of need and payment.
In brief: no more demand nor cash to pay for their GPUs.
1. Rising Inventory ≠ Red Flag
Shanaka says rising inventory is evidence of weak demand, but ignores $NVDA pricing - and many other factors we'll talk about.
When unit prices double or triple, the same volume of hardware shows up as a larger dollar value in inventories.
You'll have more bananas for $1M that airplanes, right? Just like you'll have more H100 than GB200.
When we normalize inventory by revenue - or by units shipped, the trend is stable, suggesting this is a pricing effect, not a demand problem and rising inventory in volume.
This can also be illustrated with accounts receivable per revenue, which make the same point: when product prices increase, dollar-denominated metrics rise, so metrics taken individually may look bad but within context, the story looks normal.
That being said, many could point that even then, inventory is rising. To which we need to add context, something algorythms are incapable of.
2. Higher DSO & Supply Chain Constraints
DSO - which represents the time before being paid, rising slightly is consistent with real-world constraints.
$NVDA doesn’t just ship GPUs anymore; they ship racks, custom configurations, integrated systems… These use third-party components, which require more coordination, harder logistics, and can temporarily increase time before revenue recognition and therefore inventory.
Add to this the fact that foundries, as proven many times these quarters during $TSM & co earnings, run at full capacity, and you get even more delays.
More customization + constrained supply chains = longer installation cycles before revenue can be recognized and rising inventories until then.
This is an operational bottleneck, not a credit problem.
A move from 46 to 53 days is marginal especially considering this value has been roughly stable for three quarters.
3. Circular Economy
As for the claims about a circular economy and the same dollars being used across multiple companies, I have no counters but this: circular economies are normal, that’s how economies work.
It only becomes a problem if AI services do not generate enough cash to honor commitments.
Because that’s what those are: commitments, not booked revenues. If those commitments can be honored, then what is the problem?
4. Algorithms Don’t Understand Context
Shanaka claims that this was thankfully found by algorithm - and I can agree with him based on the market's behaviour an[...]
Offshore
WealthyReadings I am still a buyer for a few handful reasons. 1. I believe the FED needs to continue to cut rates, and will in December. https://t.co/5joU9HUnh1 2. I believe in AI and that $NVDA isn't a fraud, and the data backs me up. https://t.co/jvzeGM3kwY…
d violence. But he forgets that algorythm are built to find fraud in 99% of cases.
But $NVDA is the 1%.
When revenue grows 60–80% YoY, it's normal for inventories, receivables, and payables to grow at least comparably in dollar terms. Maybe even slightly higher when added real-world constraints.
What matters is whether these metrics grow disproportionately relative to revenue.
And once normalized, $NVDA ratios are stable, which is consistent with a rapid ongoing expansion, not accounting games or demand collapse.
That being said, everything isn’t necessarily perfect. But again: algorithms are configured to gauge 99% of the market, so of course the 1% will raise red flags.
Add some organic grey cells, context and reality, and the picture is very different, even if the stock continues to fall.
The market is about emotions, not rationality. And X is great at sharing emotions, less for rationality.
Conclusion.
I might be proven wrong in time and $NVDA might be an accounting fraud. I personally continue to believe in the AI revolution, have my own concerns about the circular economy but did not find any indications that AI won't yield cash flow and that commitments can't be honored as of today.
I continue to be bullish. And shared all my moves and reasoning with subscribers yesterday.
The future is bright for those with a system. - WealthyReadings tweet
But $NVDA is the 1%.
When revenue grows 60–80% YoY, it's normal for inventories, receivables, and payables to grow at least comparably in dollar terms. Maybe even slightly higher when added real-world constraints.
What matters is whether these metrics grow disproportionately relative to revenue.
And once normalized, $NVDA ratios are stable, which is consistent with a rapid ongoing expansion, not accounting games or demand collapse.
That being said, everything isn’t necessarily perfect. But again: algorithms are configured to gauge 99% of the market, so of course the 1% will raise red flags.
Add some organic grey cells, context and reality, and the picture is very different, even if the stock continues to fall.
The market is about emotions, not rationality. And X is great at sharing emotions, less for rationality.
Conclusion.
I might be proven wrong in time and $NVDA might be an accounting fraud. I personally continue to believe in the AI revolution, have my own concerns about the circular economy but did not find any indications that AI won't yield cash flow and that commitments can't be honored as of today.
I continue to be bullish. And shared all my moves and reasoning with subscribers yesterday.
The future is bright for those with a system. - WealthyReadings tweet
Offshore
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App Economy Insights
AI skepticism is everywhere.
But $NVDA is showing the other side.
⚡️ Accelerated computing
🧠 Generative AI
🤖 Agentic + physical AI
And a $500B pipeline through 2026. 👇
https://t.co/8oyzzf4UOO
tweet
AI skepticism is everywhere.
But $NVDA is showing the other side.
⚡️ Accelerated computing
🧠 Generative AI
🤖 Agentic + physical AI
And a $500B pipeline through 2026. 👇
https://t.co/8oyzzf4UOO
tweet
Offshore
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Fiscal.ai
Uber is currently trading at more than a 5% free cash flow yield.
Near its cheapest valuation ever.
Why wouldn't Uber work from here?
$UBER https://t.co/WdmQ6J7P9A
tweet
Uber is currently trading at more than a 5% free cash flow yield.
Near its cheapest valuation ever.
Why wouldn't Uber work from here?
$UBER https://t.co/WdmQ6J7P9A
tweet
EndGame Macro
Behind the $1 Trillion Revision And The Part No One Is Talking About
The CBO trimming the tariff related deficit reduction by a trillion dollars isn’t some big ideological shift. It’s mostly housekeeping. Since August, the administration has softened parts of the tariff package, rolling back certain rates, carving out more exemptions, and giving relief to allies on key items. Once you shrink the list of goods actually hit with the full force of the tariffs, the projected revenue naturally comes down.
The CBO also cleaned up its assumptions…more imports qualifying for USMCA’s lower rates, lower metal content in a bunch of products, and updated evidence showing foreign exporters eat a slice of the tariff by cutting prices. Put all of that together and the math moves. You go from a projected $4T in deficit reduction to $3T. That’s all this revision is.
But the real story isn’t the number. It’s what the number doesn’t include.
Tariffs Look Neater on Paper Than They Feel in the Real Economy
When you read the CBO’s update closely, there’s one line that jumps out… they haven’t yet modeled the broader economic impact of the tariffs.
That means the new forecast is purely fiscal, no accounting for how tariffs change behavior, demand, prices, or global trade flows. It’s basically the spreadsheet version of the story, not the lived version.
That’s where the connection to Smoot-Hawley comes in. Not because we’re repeating 1930, we’re not but because the pattern is familiar…big tariff moves layered onto an economy that’s already losing steam. Smoot-Hawley didn’t destroy the economy on its own; it accelerated weakness that was already there. It made a fragile situation worse by raising costs and triggering retaliation at a time when global demand was already soft.
Today’s world is different…flexible exchange rates, global supply chains, a Fed that can ease but the vulnerabilities rhyme. Tariffs may bring in revenue, but they also raise input costs, complicate supply chains, and pressure margins in a system that’s already strained. A fiscal win can still be an economic drag.
What It Means Looking Forward
The government might collect $3T in tariff revenue over a decade. But revenue isn’t the same as economic strength.
As conditions soften with slower growth, tighter credit, cautious businesses the cost side of tariffs starts to matter more than the revenue side. Smoot-Hawley’s lesson wasn’t that tariffs are always catastrophic. It was that tariffs hit harder when the economy is already tiring.
That’s the part of the story the CBO hasn’t quantified yet. And that’s the part that will matter most in the real world, long after
the revenue projections fade and the economic reality takes center stage.
tweet
Behind the $1 Trillion Revision And The Part No One Is Talking About
The CBO trimming the tariff related deficit reduction by a trillion dollars isn’t some big ideological shift. It’s mostly housekeeping. Since August, the administration has softened parts of the tariff package, rolling back certain rates, carving out more exemptions, and giving relief to allies on key items. Once you shrink the list of goods actually hit with the full force of the tariffs, the projected revenue naturally comes down.
The CBO also cleaned up its assumptions…more imports qualifying for USMCA’s lower rates, lower metal content in a bunch of products, and updated evidence showing foreign exporters eat a slice of the tariff by cutting prices. Put all of that together and the math moves. You go from a projected $4T in deficit reduction to $3T. That’s all this revision is.
But the real story isn’t the number. It’s what the number doesn’t include.
Tariffs Look Neater on Paper Than They Feel in the Real Economy
When you read the CBO’s update closely, there’s one line that jumps out… they haven’t yet modeled the broader economic impact of the tariffs.
That means the new forecast is purely fiscal, no accounting for how tariffs change behavior, demand, prices, or global trade flows. It’s basically the spreadsheet version of the story, not the lived version.
That’s where the connection to Smoot-Hawley comes in. Not because we’re repeating 1930, we’re not but because the pattern is familiar…big tariff moves layered onto an economy that’s already losing steam. Smoot-Hawley didn’t destroy the economy on its own; it accelerated weakness that was already there. It made a fragile situation worse by raising costs and triggering retaliation at a time when global demand was already soft.
Today’s world is different…flexible exchange rates, global supply chains, a Fed that can ease but the vulnerabilities rhyme. Tariffs may bring in revenue, but they also raise input costs, complicate supply chains, and pressure margins in a system that’s already strained. A fiscal win can still be an economic drag.
What It Means Looking Forward
The government might collect $3T in tariff revenue over a decade. But revenue isn’t the same as economic strength.
As conditions soften with slower growth, tighter credit, cautious businesses the cost side of tariffs starts to matter more than the revenue side. Smoot-Hawley’s lesson wasn’t that tariffs are always catastrophic. It was that tariffs hit harder when the economy is already tiring.
That’s the part of the story the CBO hasn’t quantified yet. And that’s the part that will matter most in the real world, long after
the revenue projections fade and the economic reality takes center stage.
The Congressional Budget Office slashed its estimate of longer-term US fiscal savings from President Donald Trump’s tariff hikes by $1 trillion, in a move that may deepen concerns about American borrowing needs https://t.co/zKYcT80U6x tweet
X (formerly Twitter)
Bloomberg (@business) on X
The Congressional Budget Office slashed its estimate of longer-term US fiscal savings from President Donald Trump’s tariff hikes by $1 trillion, in a move that may deepen concerns about American borrowing needs https://t.co/zKYcT80U6x