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EndGame Macro
When the Biggest Meatpacker Starts Cutting Capacity, You Know the Cycle Has Turned
What Tyson is doing here isn’t a one off business decision, it’s a signal that the entire cattle and beef cycle has entered a painful stage. Tyson’s Lexington, Nebraska plant handles about 5% of total U.S. slaughter capacity, yet it’s being shut down because cattle supplies have fallen to their lowest level in nearly 75 years.
When supplies get this tight, packers like Tyson are forced to outbid each other for every animal. Ranchers finally have leverage; processors are the ones getting squeezed. Tyson’s beef division has already posted over $700M in losses across the last two fiscal years, and they’re projecting another $400M–$600M loss for 2026.
A plant that big can’t run profitably in that environment, especially when the drought driven herd liquidation that caused this shortage will take years to reverse. Closing Lexington early is Tyson basically admitting that Cattle won’t be plentiful anytime soon, so they need to shrink now rather than bleed slowly.
When Cycles Get Tight, Everything Downstream Breaks
Beef processing is brutally cyclical. During COVID, packers made record profits because labor shortages limited output and meat prices exploded. But those margins hid the structural damage happening upstream: drought destroyed pasture, feed costs soared, and ranchers culled their herds.
Now we’re living with the consequences. Cattle supply is scarce. Feedlot operators have fewer animals. Packers are fighting over limited inventory. And a plant that once ran 5,000 head per day is now running below capacity. Once that happens, the economics flip, a giant facility becomes a liability.
The local impact is enormous. Lexington is a town of about 10,000 people; losing a 3,200 worker anchor employer will hit everything from feedyards to grocery stores. Tyson knows this, which is why their statements emphasized the impact on team members and communities. But the math is what it is.
Policy Made a Tight Cycle Even Tighter
Layer policy over this and the situation gets even messier.
Tariffs on Canadian and Mexican beef raised costs for U.S. processors. Retaliatory tariffs from countries like Vietnam and Thailand cut into export markets. Meanwhile, the White House accused packers of manipulating beef prices and pushed to increase imports to bring consumer prices down, all while packers were already paying record high cattle costs.
It’s a contradiction…the government wants cheaper beef for consumers, but it has simultaneously made processors’ cost structure worse, reduced their export options, and created more volatility in supply chains.
Tyson isn’t closing plants because demand is weak. They’re closing because margin pressure, policy pressure, and supply pressure are hitting all at once.
This Is What a Commodity Crunch Looks Like
This is the classic cattle cycle playing out in real time. Years of drought and underinvestment shrink supply, the shortage forces packers to pay up, losses mount, and eventually capacity gets shuttered. And because cattle take years to grow, you can’t fix it quickly. The pain always shows up downstream first…at the processors, then in rural communities, and eventually in consumer prices.
If anything, shutting a plant this large before 2026 tells you Tyson expects the worst of the shortage hasn’t even hit yet. The herd will rebuild, but slowly. The market will rebalance, but not tomorrow. And when supply finally returns, it will do so unevenly with fewer plants left standing to process it.
This is the U.S. beef supply chain signaling that a multi year scarcity cycle is underway and the consequences will ripple through the entire system.
Exclusive: Tyson Foods, America’s largest meat supplier, is planning to close one of its largest beef-processing plants in Nebraska at a time when a cattle shortage in the U.S. squeezes meatpacking companies https://t.co/QcaowlaCGz - The Wall Street Journal tweet
When the Biggest Meatpacker Starts Cutting Capacity, You Know the Cycle Has Turned
What Tyson is doing here isn’t a one off business decision, it’s a signal that the entire cattle and beef cycle has entered a painful stage. Tyson’s Lexington, Nebraska plant handles about 5% of total U.S. slaughter capacity, yet it’s being shut down because cattle supplies have fallen to their lowest level in nearly 75 years.
When supplies get this tight, packers like Tyson are forced to outbid each other for every animal. Ranchers finally have leverage; processors are the ones getting squeezed. Tyson’s beef division has already posted over $700M in losses across the last two fiscal years, and they’re projecting another $400M–$600M loss for 2026.
A plant that big can’t run profitably in that environment, especially when the drought driven herd liquidation that caused this shortage will take years to reverse. Closing Lexington early is Tyson basically admitting that Cattle won’t be plentiful anytime soon, so they need to shrink now rather than bleed slowly.
When Cycles Get Tight, Everything Downstream Breaks
Beef processing is brutally cyclical. During COVID, packers made record profits because labor shortages limited output and meat prices exploded. But those margins hid the structural damage happening upstream: drought destroyed pasture, feed costs soared, and ranchers culled their herds.
Now we’re living with the consequences. Cattle supply is scarce. Feedlot operators have fewer animals. Packers are fighting over limited inventory. And a plant that once ran 5,000 head per day is now running below capacity. Once that happens, the economics flip, a giant facility becomes a liability.
The local impact is enormous. Lexington is a town of about 10,000 people; losing a 3,200 worker anchor employer will hit everything from feedyards to grocery stores. Tyson knows this, which is why their statements emphasized the impact on team members and communities. But the math is what it is.
Policy Made a Tight Cycle Even Tighter
Layer policy over this and the situation gets even messier.
Tariffs on Canadian and Mexican beef raised costs for U.S. processors. Retaliatory tariffs from countries like Vietnam and Thailand cut into export markets. Meanwhile, the White House accused packers of manipulating beef prices and pushed to increase imports to bring consumer prices down, all while packers were already paying record high cattle costs.
It’s a contradiction…the government wants cheaper beef for consumers, but it has simultaneously made processors’ cost structure worse, reduced their export options, and created more volatility in supply chains.
Tyson isn’t closing plants because demand is weak. They’re closing because margin pressure, policy pressure, and supply pressure are hitting all at once.
This Is What a Commodity Crunch Looks Like
This is the classic cattle cycle playing out in real time. Years of drought and underinvestment shrink supply, the shortage forces packers to pay up, losses mount, and eventually capacity gets shuttered. And because cattle take years to grow, you can’t fix it quickly. The pain always shows up downstream first…at the processors, then in rural communities, and eventually in consumer prices.
If anything, shutting a plant this large before 2026 tells you Tyson expects the worst of the shortage hasn’t even hit yet. The herd will rebuild, but slowly. The market will rebalance, but not tomorrow. And when supply finally returns, it will do so unevenly with fewer plants left standing to process it.
This is the U.S. beef supply chain signaling that a multi year scarcity cycle is underway and the consequences will ripple through the entire system.
Exclusive: Tyson Foods, America’s largest meat supplier, is planning to close one of its largest beef-processing plants in Nebraska at a time when a cattle shortage in the U.S. squeezes meatpacking companies https://t.co/QcaowlaCGz - The Wall Street Journal tweet
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App Economy Insights
🗓️ Short week ahead!
What are you watching?
• Monday: $ZM
• Tuesday: $BABA $ZS $WDAY $ADSK $ADI $DELL $NTNX $NIO
All visualized in our newsletter. https://t.co/x6tI84yryd
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🗓️ Short week ahead!
What are you watching?
• Monday: $ZM
• Tuesday: $BABA $ZS $WDAY $ADSK $ADI $DELL $NTNX $NIO
All visualized in our newsletter. https://t.co/x6tI84yryd
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Fiscal.ai
If you invested $10,000 in Disney 10 years ago, you would now have...
$9,870
$DIS https://t.co/K49ko8Fya3
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If you invested $10,000 in Disney 10 years ago, you would now have...
$9,870
$DIS https://t.co/K49ko8Fya3
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EndGame Macro
Mark Cuban’s Been Right: PBMs Are Gutting Local Pharmacies in Real Time
According to the article, Walgreens is buying the pharmacy business of Fruth, a 73 year old regional chain in WV/KY/OH, and Fruth will shut all of its retail stores by the end of 2025. The owner is blunt about why…she says PBMs are reimbursing pharmacies less than the actual cost of the medication, and that this “has caused the closure of thousands of pharmacies across America.”
So Walgreens isn’t swooping in because the model is thriving. It’s buying the scripts off a distressed regional player who can’t survive in a world where three giant PBMs set reimbursement rates in opaque contracts and claw money back later with fees. Independents and small chains don’t have the scale or negotiating leverage, so one by one they get rolled up or disappear. You end up with fewer local pharmacies, less competition, and more market power concentrated in a handful of national chains and benefit managers. That’s good for the middlemen; it’s usually bad for prices, access, and community health.
This is exactly the problem Mark Cuban (@mcuban) has been talking about. His whole Cost Plus Drugs model is built around cutting PBMs out of the loop by buying directly from manufacturers, publish the actual acquisition cost, add a fixed markup and a small pharmacy fee, and ship it to patients without the hidden rebates, spread pricing, or retroactive DIR games. He’s basically saying: if PBMs are the ones squeezing margins so hard that 70 year old family chains like Fruth can’t survive, the answer isn’t another round of consolidation, it’s changing how the money flows in the first place.
So when you see a tweet like this, it’s not just a random M&A headline. It’s another data point in the story Cuban’s been trying to tell…the current PBM driven pharmacy ecosystem is structurally hostile to small players, accelerates consolidation, and ultimately leaves patients and towns with fewer choices and higher fragility.
tweet
Mark Cuban’s Been Right: PBMs Are Gutting Local Pharmacies in Real Time
According to the article, Walgreens is buying the pharmacy business of Fruth, a 73 year old regional chain in WV/KY/OH, and Fruth will shut all of its retail stores by the end of 2025. The owner is blunt about why…she says PBMs are reimbursing pharmacies less than the actual cost of the medication, and that this “has caused the closure of thousands of pharmacies across America.”
So Walgreens isn’t swooping in because the model is thriving. It’s buying the scripts off a distressed regional player who can’t survive in a world where three giant PBMs set reimbursement rates in opaque contracts and claw money back later with fees. Independents and small chains don’t have the scale or negotiating leverage, so one by one they get rolled up or disappear. You end up with fewer local pharmacies, less competition, and more market power concentrated in a handful of national chains and benefit managers. That’s good for the middlemen; it’s usually bad for prices, access, and community health.
This is exactly the problem Mark Cuban (@mcuban) has been talking about. His whole Cost Plus Drugs model is built around cutting PBMs out of the loop by buying directly from manufacturers, publish the actual acquisition cost, add a fixed markup and a small pharmacy fee, and ship it to patients without the hidden rebates, spread pricing, or retroactive DIR games. He’s basically saying: if PBMs are the ones squeezing margins so hard that 70 year old family chains like Fruth can’t survive, the answer isn’t another round of consolidation, it’s changing how the money flows in the first place.
So when you see a tweet like this, it’s not just a random M&A headline. It’s another data point in the story Cuban’s been trying to tell…the current PBM driven pharmacy ecosystem is structurally hostile to small players, accelerates consolidation, and ultimately leaves patients and towns with fewer choices and higher fragility.
https://t.co/9ZUqEkolV9 tweet
EndGame Macro
The old model really is breaking down. Decades of leverage, financial engineering, and artificially low rates have left the monetary architecture brittle. Correlations don’t behave, the Fed’s usual tools don’t map cleanly to outcomes, and new rails like stablecoins, tokenized Treasuries, Bitcoin are no longer experiments. They’re beginning to shape real flows. Stablecoins now export dollar rails without SWIFT. Bitcoin serves as a macro signal and collateral rather than a curiosity. And JPMorgan still sits in the middle of the legacy structure, running settlement, derivatives, custody, and clearing in a way that makes them indispensable.
So yes, there is a genuine struggle over who ends up controlling the next version of the dollar system. But the idea that this is as simple as the Treasury and Bitcoin vs. JPM and the Fed showdown misses the messy, factional reality of U.S. monetary power. The Fed Board, regional Feds, Treasury, Congress, regulators, courts, big banks, ETF issuers none of them move in unison. They contradict each other, negotiate, leak, and adapt. The fact that Scott Bessent and Jerome Powell are literally having breakfast almost every week, calmly talking through risks etc…is the giveaway. This isn’t institutional civil war; it’s coordinated tension inside the same regime.
The biggest thing that needs to be highlighted is fiscal dominance, the gravitational force created by deficits and debt. When the fiscal position deteriorates enough, the Treasury’s needs begin to dictate monetary policy almost automatically. The Fed’s independence erodes not because of a coordinated plot, but because the math leaves it with fewer choices. You can’t fight inflation and keep the government funded forever. Eventually the priority shifts toward stabilizing the bond market and accommodating issuance. In that world, Treasury gaining influence over issuance, settlement, and digital rails isn’t a coup, it’s the logical endgame of the debt super cycle.
JPM also isn’t the panicked dinosaur the narrative suggests. They’re already building tokenized dollar platforms, banking crypto firms, touching Bitcoin ETFs, and positioning themselves as a liquidity and custody layer for any future stablecoin system. If Treasury leans into a stablecoin heavy architecture, they’ll still need regulated credit, custody, and settlement. JPM will happily provide some of that. Their goal isn’t to stop the new rails, it’s to sit in the middle of them.
Bitcoin isn’t a clean insurgent either. It has become a pressure valve for the existing system: speculative energy can blow off without feeding CPI, flows are traced through KYC’d on ramps, and custody is concentrating in a handful of regulated warehouses. You don’t need to control the protocol to shape its role. You only need to control the pipes around it.
Put it all together and the more realistic and still slightly dark interpretation looks like this…Powell’s higher for longer isn’t just late cycle inflation management; it’s a deliberate dollar scarcity squeeze on the rest of the world. Treasury, drifting into fiscal dominance, is experimenting with new rails to deepen demand for U.S. debt. The big banks are adapting so that no matter which rails win, they remain unavoidable. And Bitcoin and stablecoins aren’t the combatants, they’re the terrain everyone is trying to shape.
Something enormous is happening. But it’s not two tidy factions battling it out. It’s a messy transition where the Fed, Treasury, banks, and digital rail ecosystems are all trying to survive the same breaking wave with each maneuvering to make sure they end up closest to the spigot when the new architecture hardens.
tweet
The old model really is breaking down. Decades of leverage, financial engineering, and artificially low rates have left the monetary architecture brittle. Correlations don’t behave, the Fed’s usual tools don’t map cleanly to outcomes, and new rails like stablecoins, tokenized Treasuries, Bitcoin are no longer experiments. They’re beginning to shape real flows. Stablecoins now export dollar rails without SWIFT. Bitcoin serves as a macro signal and collateral rather than a curiosity. And JPMorgan still sits in the middle of the legacy structure, running settlement, derivatives, custody, and clearing in a way that makes them indispensable.
So yes, there is a genuine struggle over who ends up controlling the next version of the dollar system. But the idea that this is as simple as the Treasury and Bitcoin vs. JPM and the Fed showdown misses the messy, factional reality of U.S. monetary power. The Fed Board, regional Feds, Treasury, Congress, regulators, courts, big banks, ETF issuers none of them move in unison. They contradict each other, negotiate, leak, and adapt. The fact that Scott Bessent and Jerome Powell are literally having breakfast almost every week, calmly talking through risks etc…is the giveaway. This isn’t institutional civil war; it’s coordinated tension inside the same regime.
The biggest thing that needs to be highlighted is fiscal dominance, the gravitational force created by deficits and debt. When the fiscal position deteriorates enough, the Treasury’s needs begin to dictate monetary policy almost automatically. The Fed’s independence erodes not because of a coordinated plot, but because the math leaves it with fewer choices. You can’t fight inflation and keep the government funded forever. Eventually the priority shifts toward stabilizing the bond market and accommodating issuance. In that world, Treasury gaining influence over issuance, settlement, and digital rails isn’t a coup, it’s the logical endgame of the debt super cycle.
JPM also isn’t the panicked dinosaur the narrative suggests. They’re already building tokenized dollar platforms, banking crypto firms, touching Bitcoin ETFs, and positioning themselves as a liquidity and custody layer for any future stablecoin system. If Treasury leans into a stablecoin heavy architecture, they’ll still need regulated credit, custody, and settlement. JPM will happily provide some of that. Their goal isn’t to stop the new rails, it’s to sit in the middle of them.
Bitcoin isn’t a clean insurgent either. It has become a pressure valve for the existing system: speculative energy can blow off without feeding CPI, flows are traced through KYC’d on ramps, and custody is concentrating in a handful of regulated warehouses. You don’t need to control the protocol to shape its role. You only need to control the pipes around it.
Put it all together and the more realistic and still slightly dark interpretation looks like this…Powell’s higher for longer isn’t just late cycle inflation management; it’s a deliberate dollar scarcity squeeze on the rest of the world. Treasury, drifting into fiscal dominance, is experimenting with new rails to deepen demand for U.S. debt. The big banks are adapting so that no matter which rails win, they remain unavoidable. And Bitcoin and stablecoins aren’t the combatants, they’re the terrain everyone is trying to shape.
Something enormous is happening. But it’s not two tidy factions battling it out. It’s a messy transition where the Fed, Treasury, banks, and digital rail ecosystems are all trying to survive the same breaking wave with each maneuvering to make sure they end up closest to the spigot when the new architecture hardens.
https://t.co/19EgCtgKx4 tweet
X (formerly Twitter)
Maryland HODL (BitBonds = Structural Innovation) (@MarylandHODL21) on X
Trump’s Gambit: The Quiet War Between the White House and JPMorgan
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EndGame Macro
Starve the World, Then Pivot…The Harsh Strategy Underneath U.S. Monetary Policy
Ever since Trump returned to office in January, one thing has become clearer every month…global dollar scarcity has been tightening, not easing. And it hasn’t happened by accident. The policies he’s chosen like tariffs, trade friction actually created the perfect setup for the Fed to not cut rates. Instead of loosening financial conditions, the system has been pulled tighter.
From January to now, the Fed kept rates elevated, only trimming lightly in September and October. QT continuing right into December 1st, removing liquidity and collateral from the system. At the same time, Trump’s tariff heavy approach pushed import prices higher, disrupted supply chains, and added a layer of inflationary pressure right when the Fed needed a narrative to justify staying cautious. Every move that supposedly should have pushed Powell toward cuts did the opposite. It reinforced the case for higher for longer.
If Trump genuinely wanted Powell to cut aggressively, this isn’t the policy mix he’d use. Inflation was sticky. And Powell, whose mandate is still framed around stable prices, gets political cover to sit tight and delay meaningful easing.
But that’s where the deeper logic starts to show. High U.S. rates don’t just cool the American economy, they create global dollar scarcity. When dollars are expensive and liquidity is tight, the pressure hits other economies faster and harder than it hits the U.S. Emerging markets feel funding stress. Europe struggles under higher dollar denominated costs. China faces capital strain and tighter refinancing windows. Any nation running dollar debt and that’s most of the world feels the squeeze.
Today the pattern is unmistakable…the dollar is scarce, global funding is tight, and the countries Trump most wants leverage over are the ones struggling most. And because QT isn’t over until December 1st, that scarcity wasn’t just maintained, it intensified throughout his first year back in office.
If the Fed had cut rates aggressively earlier in 2025, it would have eased the pressure abroad. A weaker dollar would have reduced debt burdens, improved financial conditions, and given breathing room to BRICS economies, heavily indebted sovereigns, and energy importers. Rate cuts would have helped the rest of the world far more than they would have helped the U.S. And if your strategic goal is to box rival nations into a corner, the last thing you want is to relieve their pressure valve.
So the contradiction resolves itself…Trump publicly demands cuts while creating conditions that give Powell every excuse not to. Keeping rates high and dollars scarce hurts everyone else first. Then, when global stress peaks, the U.S. can decide who gets access to fresh dollar liquidity likely through stablecoins, tokenized Treasuries, or whatever the next dollar rails become.
That’s the real shift since January, the U.S. looks increasingly willing to tolerate domestic pain to maximize geopolitical leverage abroad. And right now dollar scarcity has become the defining feature of that strategy.
tweet
Starve the World, Then Pivot…The Harsh Strategy Underneath U.S. Monetary Policy
Ever since Trump returned to office in January, one thing has become clearer every month…global dollar scarcity has been tightening, not easing. And it hasn’t happened by accident. The policies he’s chosen like tariffs, trade friction actually created the perfect setup for the Fed to not cut rates. Instead of loosening financial conditions, the system has been pulled tighter.
From January to now, the Fed kept rates elevated, only trimming lightly in September and October. QT continuing right into December 1st, removing liquidity and collateral from the system. At the same time, Trump’s tariff heavy approach pushed import prices higher, disrupted supply chains, and added a layer of inflationary pressure right when the Fed needed a narrative to justify staying cautious. Every move that supposedly should have pushed Powell toward cuts did the opposite. It reinforced the case for higher for longer.
If Trump genuinely wanted Powell to cut aggressively, this isn’t the policy mix he’d use. Inflation was sticky. And Powell, whose mandate is still framed around stable prices, gets political cover to sit tight and delay meaningful easing.
But that’s where the deeper logic starts to show. High U.S. rates don’t just cool the American economy, they create global dollar scarcity. When dollars are expensive and liquidity is tight, the pressure hits other economies faster and harder than it hits the U.S. Emerging markets feel funding stress. Europe struggles under higher dollar denominated costs. China faces capital strain and tighter refinancing windows. Any nation running dollar debt and that’s most of the world feels the squeeze.
Today the pattern is unmistakable…the dollar is scarce, global funding is tight, and the countries Trump most wants leverage over are the ones struggling most. And because QT isn’t over until December 1st, that scarcity wasn’t just maintained, it intensified throughout his first year back in office.
If the Fed had cut rates aggressively earlier in 2025, it would have eased the pressure abroad. A weaker dollar would have reduced debt burdens, improved financial conditions, and given breathing room to BRICS economies, heavily indebted sovereigns, and energy importers. Rate cuts would have helped the rest of the world far more than they would have helped the U.S. And if your strategic goal is to box rival nations into a corner, the last thing you want is to relieve their pressure valve.
So the contradiction resolves itself…Trump publicly demands cuts while creating conditions that give Powell every excuse not to. Keeping rates high and dollars scarce hurts everyone else first. Then, when global stress peaks, the U.S. can decide who gets access to fresh dollar liquidity likely through stablecoins, tokenized Treasuries, or whatever the next dollar rails become.
That’s the real shift since January, the U.S. looks increasingly willing to tolerate domestic pain to maximize geopolitical leverage abroad. And right now dollar scarcity has become the defining feature of that strategy.
The enemy has a name: it's the Banking system.
Take a look at the chart of JPM since the great financial crisis. It's been STRAIGHT UP for the last 15 years.
JP Morgan has been consolidating its power as the head of the Banking Crime syndicate through both Obama terms, Trump 1.0 and Biden.
The Fed works for JPM.
They HATE Bitcoin, DEFI and Stablecoins. They quietly architected Chokepoint 1.0 and 2.0. Now, they see Bitcoin as vulnerable and they are putting the screws on MSTR.
Against this, we have Trump, Bessant, and a potentially new Fed in May, completely under treasury contol.
Bitcoin as a strategic asset.
This is going to be an EPIC battle. tweet
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EndGame Macro
The Banking System’s Hidden Wound And Why the Fed Can’t Slip Up
What you’re looking at is the hangover from the fastest rate shock in modern U.S. history. Banks spent years piling into Treasuries and MBS when yields were near zero, and once the Fed slammed rates higher, the value of those bonds collapsed. The blue and brown bars show the gap between what those securities are worth today and what’s on the banks’ books. As of mid 2025, that hole is still enormous. These aren’t realized losses but they’re very real pressure sitting beneath the surface.
Why These Losses Haven’t Blown Up the System (Yet)
Unrealized losses only stay unrealized if banks don’t have to sell. As long as deposits are stable and regulators give them breathing room, they can hold these bonds to maturity and get paid back at par. That’s why the Fed rolled out emergency lending tools in 2023, why they quietly relaxed some capital expectations, and why rate cuts are happening at a slow, careful pace. The entire strategy is about buying time so the duration mismatch can heal instead of detonating.
How They Could Become Real Losses
The danger is forced selling. If banks lose deposits, lose wholesale funding, or get pushed into resolution or merger, they have to mark these securities to market and that’s when paper losses become actual capital hits. Another spike in yields, a confidence shock, or even an aggressive regulatory stance could flip that switch. That’s exactly how SVB went from technically solvent to failure in 48 hours.
This is why the Fed can’t be cavalier here. They can’t keep rates too high for too long without deepening these losses.
They’re threading the needle…easing slowly, keeping liquidity backstops open, and quietly praying no one forces the system to recognize those losses all at once.
This chart is a reminder that the banking system is still carrying a massive rate shock wound. The only thing keeping it contained is time, liquidity support, and a policy path designed to let banks survive long enough for the bonds to mature. Without that, those unrealized losses can become very real, very fast.
tweet
The Banking System’s Hidden Wound And Why the Fed Can’t Slip Up
What you’re looking at is the hangover from the fastest rate shock in modern U.S. history. Banks spent years piling into Treasuries and MBS when yields were near zero, and once the Fed slammed rates higher, the value of those bonds collapsed. The blue and brown bars show the gap between what those securities are worth today and what’s on the banks’ books. As of mid 2025, that hole is still enormous. These aren’t realized losses but they’re very real pressure sitting beneath the surface.
Why These Losses Haven’t Blown Up the System (Yet)
Unrealized losses only stay unrealized if banks don’t have to sell. As long as deposits are stable and regulators give them breathing room, they can hold these bonds to maturity and get paid back at par. That’s why the Fed rolled out emergency lending tools in 2023, why they quietly relaxed some capital expectations, and why rate cuts are happening at a slow, careful pace. The entire strategy is about buying time so the duration mismatch can heal instead of detonating.
How They Could Become Real Losses
The danger is forced selling. If banks lose deposits, lose wholesale funding, or get pushed into resolution or merger, they have to mark these securities to market and that’s when paper losses become actual capital hits. Another spike in yields, a confidence shock, or even an aggressive regulatory stance could flip that switch. That’s exactly how SVB went from technically solvent to failure in 48 hours.
This is why the Fed can’t be cavalier here. They can’t keep rates too high for too long without deepening these losses.
They’re threading the needle…easing slowly, keeping liquidity backstops open, and quietly praying no one forces the system to recognize those losses all at once.
This chart is a reminder that the banking system is still carrying a massive rate shock wound. The only thing keeping it contained is time, liquidity support, and a policy path designed to let banks survive long enough for the bonds to mature. Without that, those unrealized losses can become very real, very fast.
BREAKING 🚨: U.S. Banks
U.S. Banks are now sitting on $395 Billion in unrealized losses as of Q2 2025 👀 https://t.co/uAvaWhquhv tweet
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EndGame Macro
RT @LukeGromen: Note US military official's point on Russia's industrial base; big shift from "Russia's been reduced to using chips from washing machines to make missiles."
Reality just began getting marked to market
"Amateurs talk tactics; professionals study logistics."
-USMC Gen. Barrow https://t.co/DEqiJrawBQ
tweet
RT @LukeGromen: Note US military official's point on Russia's industrial base; big shift from "Russia's been reduced to using chips from washing machines to make missiles."
Reality just began getting marked to market
"Amateurs talk tactics; professionals study logistics."
-USMC Gen. Barrow https://t.co/DEqiJrawBQ
tweet
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Quiver Quantitative
JUST IN: The US is reportedly considering an attempt to overthrow Venezuelan leader Nicholas Maduro, per Fox News.
Polymarket now gives a 69% chance of conflict by April. https://t.co/lBjyaHPMrK
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JUST IN: The US is reportedly considering an attempt to overthrow Venezuelan leader Nicholas Maduro, per Fox News.
Polymarket now gives a 69% chance of conflict by April. https://t.co/lBjyaHPMrK
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Fiscal.ai
Li Lu did not buy or sell a single share in Q3.
Talk about patience. https://t.co/fige5vTU1x
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Li Lu did not buy or sell a single share in Q3.
Talk about patience. https://t.co/fige5vTU1x
tweet