EndGame Macro
The Holiday Spending Boom Built on Tomorrow’s Money

People are trying to make holiday spending fit into a monthly budget that’s already stretched thin. BNPL becomes the workaround…not a splurge tool, but a pressure valve.

What stands out is the type of purchases driving the surge. Tech, cosmetics, travel, these aren’t emergency expenses. They’re the things people want to keep in their lives, even if their checking account says that they shouldn’t. So instead of scaling back, they spread the payment over four or six weeks and tell themselves it’s fine. It’s a way of preserving the lifestyle they’re used to without feeling the full hit upfront.

A Sign of Confidence But Also of Strain

Retailers love BNPL because it boosts conversions, and consumers love it because it softens the blow. But the bigger picture is that it functions like an invisible credit layer under the surface of the economy. It doesn’t show up on credit reports the same way. It doesn’t trigger the same psychological I’m in debt response. That’s exactly why usage explodes during times like this, it feels harmless even when it’s adding up.

My read is that this is a sign that people are out of clean options. Credit cards are expensive. Savings are thinner. Costs across the board are higher. BNPL fills the gap between the life people want to live and what their immediate cash flow can support. And when enough households rely on it at once, it props up spending numbers in the short run while quietly raising the risk that the future months get tighter.

BNPL is booming. But the boom is telling you the consumer is definitely straining and this is the tool they’re using to hold things together.

Buy now pay later usage surged to a record weekend from Black Friday thru Cyber Monday, with consumers deferring payments on technology, cosmetics, travel plans, and more

#MacroEdge - MacroEdge
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App Economy Insights
$WBD Warner Bros. could be on the move again.

Netflix and Comcast only want Studios + Streaming.
Cable would need a spin-off.

The buyer pool is: $NFLX $CMCSA $PSKY

Who do you think ends up with Warner's IP vault? https://t.co/PGkVRndksD
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Dimitry Nakhla | Babylon Capital®
RT @realroseceline: Where does your investing edge come from?

Most people have no idea what their actual edge comes from. They think it comes from finding some hidden piece of information or running fancy models. They think it comes from valuation spreadsheets or a unique angle on a company. News flash, it almost never does.

The truth is the entire world sees the same numbers and information. Everyone has access to the same filings, the same earnings calls, the same charts, the same news, the same Twitter threads, all the same info. Information is not where your advantage comes from anymore, no one has an information advantage nowadays. If everyone is reading the same thing you are not going to win by out reading them.

Your edge comes from something far more boring and far more powerful. It comes from temperament and how you behave when the market gives you a choice between pain and discipline. It comes from how you handle fear, greed, boredom, and uncertainty. It comes from your ability to sit still when every instinct tells you to act.

Most people lose not because they are stupid but because they cannot sit with discomfort and boredom. They sell winners too early, they hold losers too long, they chase predictions, they change strategies every six months. They let headlines dictate their portfolio. They copy whatever is trending. They do everything except build a durable emotional system that can survive volatility.

The irony is that investing is not really about being right. It is about staying in the game long enough for your decisions to matter. That is why temperament and emotional control become the greatest edge. If you can stay rational while others panic you automatically rise above the vast majority of participants. If you can hold a compounder without getting shaken out your results will look like genius even if your “analysis” was simple.

People love to talk about alpha but almost nobody talks about behavior. Yet behavior is where most investors fail. Your edge is your ability to think clearly when the market is trying to pull you into the madness of crowds. Your edge is the patience to let compounding work on its own schedule. Your edge is knowing who you are and refusing to trade away that identity for a quick thrill.

If you want an edge stop looking for secrets in numbers. Start looking for discipline in yourself. That is what separates the people who do well for a year from the people who do well for a lifetime.

So here is the million question, how do you build a real edge? You master yourself, learn to stay calm when everyone else panics, and stay patient when everyone else chases excitement. That inner discipline is the advantage almost nobody develops. If you want to build it the right way start with reading my upcoming book because the vast majority of it is about the psychological and emotional foundation that makes long term success possible and highly probable.

Happy Monday all!

🌹
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Dimitry Nakhla | Babylon Capital®
This couldn’t be more true — and coincidentally, I’ve been working on a post I’ll share tomorrow morning that highlights many of the same points in Rose’s post

Specifically:

“That is why temperament and emotional control become the greatest edge…

People love to talk about alpha but almost nobody talks about behavior. Yet behavior is where most investors fail. Your edge is your ability to think clearly when the market is trying to pull you into the madness of crowds.”

Where does your investing edge come from?

Most people have no idea what their actual edge comes from. They think it comes from finding some hidden piece of information or running fancy models. They think it comes from valuation spreadsheets or a unique angle on a company. News flash, it almost never does.

The truth is the entire world sees the same numbers and information. Everyone has access to the same filings, the same earnings calls, the same charts, the same news, the same Twitter threads, all the same info. Information is not where your advantage comes from anymore, no one has an information advantage nowadays. If everyone is reading the same thing you are not going to win by out reading them.

Your edge comes from something far more boring and far more powerful. It comes from temperament and how you behave when the market gives you a choice between pain and discipline. It comes from how you handle fear, greed, boredom, and uncertainty. It comes from your ability to sit still when every instinct tells you to act.

Most people lose not because they are stupid but because they cannot sit with discomfort and boredom. They sell winners too early, they hold losers too long, they chase predictions, they change strategies every six months. They let headlines dictate their portfolio. They copy whatever is trending. They do everything except build a durable emotional system that can survive volatility.

The irony is that investing is not really about being right. It is about staying in the game long enough for your decisions to matter. That is why temperament and emotional control become the greatest edge. If you can stay rational while others panic you automatically rise above the vast majority of participants. If you can hold a compounder without getting shaken out your results will look like genius even if your “analysis” was simple.

People love to talk about alpha but almost nobody talks about behavior. Yet behavior is where most investors fail. Your edge is your ability to think clearly when the market is trying to pull you into the madness of crowds. Your edge is the patience to let compounding work on its own schedule. Your edge is knowing who you are and refusing to trade away that identity for a quick thrill.

If you want an edge stop looking for secrets in numbers. Start looking for discipline in yourself. That is what separates the people who do well for a year from the people who do well for a lifetime.

So here is the million question, how do you build a real edge? You master yourself, learn to stay calm when everyone else panics, and stay patient when everyone else chases excitement. That inner discipline is the advantage almost nobody develops. If you want to build it the right way start with reading my upcoming book because the vast majority of it is about the psychological and emotional foundation that makes long term success possible and highly probable.

Happy Monday all!

🌹 - Rose Celine Investments 🌹
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Quiver Quantitative
BREAKING: Representative Ro Khanna has said that there will be a bipartisan investigation into Pete Hegseth by the House Armed Services Committee

https://t.co/61oFiBZ4Oj
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EndGame Macro
If you boil David’s point, it’s essentially this…people are suddenly terrified of Japanese long term yields now, after they’ve already exploded higher… but they weren’t terrified when those same bonds were yielding basically nothing. And that, to him, is backwards.

He’s reminding everyone that the real moment of danger was years ago when Japan’s 40 year bond yielded 0.04%. At that level, the price of the bond was insanely inflated. There was no income, no cushion, and almost unlimited downside if yields ever normalized. That was the setup that should’ve made people nervous.

Why Today Isn’t the Scary Part

Fast forward to now and the 20, 30, and 40 year JGBs are all yielding around 3–4% levels Japan hasn’t seen in decades. And getting from 0% to 3–4% absolutely wrecked anyone who bought at the bottom. The damage already happened. The losses have already been absorbed. The repricing is largely behind us.

So when people look at today’s high yields and say now it’s dangerous, he’s calling that out. High yields don’t mean just in time to panic. They mean the market has already burned through the risky part. Today’s yields actually offer something…income, cushion, and a much better entry point than anything you saw in the last fifteen years.

You should’ve been afraid when yields were microscopic and valuations were insane, not now after the crash has already happened. If anything, this is closer to the point where future returns start looking more attractive, not less.

He’s not giving advice, he’s just reversing the emotional logic. The real bubble was then. The fear is now. And he thinks that’s the wrong way around.

These yields reflect enormous damage. The idea that now is the time to be afraid is bizarre.

June of 2016 0.041 bp. That’s 1/25 of one percent and now people are worried that’s when you should’ve been worried now you should be greedy and that’s not advice. https://t.co/dCtR9hs9E0 - David Levenson. I am increasing low beta leverage.
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EndGame Macro
The Fed Isn’t Reporting the Present It’s Preparing for What’s Coming

If you read Bowman’s statement straight through, it sounds like the usual banks are sound, capital is strong, everything’s fine update. But once you slow it down, the message underneath is very different. She’s not talking to Congress about how great the banking system is, she’s preparing them for a shift. The language she uses such as “tailoring,” “reducing burden,” “avoiding unnecessary constraints,” “empowering banks to compete” shows you exactly where her head is. Regulators only talk like this when they think the economy is going to need more credit, more flexibility, and fewer barriers. You don’t emphasize easing rules unless you think the current framework is too tight for the environment you’re heading into.

The Push for More Credit Flow

One of the clearest tells is her focus on mortgages. She basically says banks have been pulling back because capital treatment makes mortgages unattractive, and that this may be holding back access to credit. The Fed doesn’t bring this up unless they’re worried that housing, one of the biggest drivers of household wealth and economic momentum, is too frozen. By talking openly about recalibrating mortgage rules so banks can step back into that space, she’s signaling the Fed wants more participation from banks, not less. She does something similar with Treasuries, criticizing leverage rules that discourage banks from holding government debt. That’s a polite way of saying that the United States is issuing a mountain of bonds, and regulators don’t want capital rules getting in the way of banks absorbing them.

Loosening the Rulebook Without Saying It

She spends an unusual amount of time arguing that current rules were written for the big banks and shouldn’t be pushed onto smaller lenders. When a Vice Chair repeatedly calls rules “outdated,” “burdensome,” and “misaligned with reality,” that’s not a philosophical point. It’s groundwork for dialing them back. Her promise that this year’s regulatory review will lead to substantive change, something she notes did not happen in previous reviews is a quiet way of telling Congress that meaningful rollbacks are coming. And they’re not coming because the system is overheating. They’re coming because the Fed wants to make sure smaller banks are able to lend into a softer economy instead of getting smothered by G-SIB era rules.

The Digital and Political Subtext

The stablecoin and digital assets section is also revealing. She doesn’t frame these things as threats. She frames them as technologies banks need to be able to compete with. That’s a strategic move. It suggests the Fed isn’t trying to wall off traditional banking from new payment structures, they’re trying to bring those structures under the Fed’s umbrella before the next major shift in financial rails happens. At the same time, she goes out of her way to distance supervision from reputational risk and political pressure. That’s not about finance. That’s about protecting the Fed from becoming a political weapon as the economy slows. She’s trying to depoliticize the supervisory process before it gets dragged into the fights she can already see coming.

My Read

When you put it all together, the testimony reads less like a report on what has happened and more like preparation for what the Fed expects to happen next. They want banks willing to lend. They want smaller lenders freed up. They want mortgages flowing again. They want banks comfortable holding Treasuries. And they want fewer regulatory chokepoints that could make a slowdown worse. A regulator doesn’t talk like this in a booming economy. They talk like this when they see softness ahead and want to get the plumbing ready before the pressure hits. In my opinion Bowman is laying the groundwork for a more flexible, credit friendly regime because she knows the economy will need it.

Now available: Testimony by Vice Chair for Supervision Bowman on supervision an[...]

d regulation: https://t.co/7NdIa0EZDX

Watch testimony live tomorrow, 12/2, at 10:00 a.m. - Federal Reserve tweet

EndGame Macro
What the Supervision and Regulation Report Really Reveals Beneath the Calm Tone

If you read past the opening tone and pay attention to what they feel compelled to explain, the report is not describing a system that’s cruising. It’s describing a system the Fed is quietly preparing for a slower, more fragile stretch ahead.

Where the Cracks Show Up

The big contradiction is that the Fed keeps insisting banks are well positioned while also walking through a list of stress points that are all in the places most sensitive to a late cycle slowdown. Office delinquencies at large banks are hovering near 10%, commercial real estate delinquencies are roughly double their decade average, and consumer credit delinquencies, especially credit cards and auto loans are still above their 10 year norms even after a slight pullback. The report frames all of this as contained, but the details say these issues aren’t going away. They’re spreading, and they’re landing on the borrowers who feel higher rates most directly.

Loan growth is positive, but the composition is telling. A meaningful portion of the growth is in loans to nonbank financials, private credit funds and other leveraged lenders who themselves loan to riskier borrowers. That’s not a sign of a booming real economy. It’s a sign banks are reaching further out on the risk spectrum because the best borrowers are sitting out at these rates. On top of that, some big banks are leaning more on short term wholesale funding, which is cheap when markets are calm but evaporates quickly when conditions tighten. The report never calls this a problem, but it highlights it for a reason.

The Regulatory Shift Hiding in Plain Sight

The clearest foreshadowing is in the policy adjustments. The Fed is easing the leverage ratio for large banks so it acts more like a backstop instead of the binding constraint, a polite way of saying they want banks to have more balance sheet room to hold Treasuries. They’re lowering the community bank leverage ratio from 9% to 8% and giving smaller banks more time to fix shortfalls. They’re streamlining supervisory expectations, narrowing what examiners can pressure banks over, and reducing the complexity of performance ratings. These aren’t cosmetic adjustments. They’re pressure releases.

You don’t loosen capital rules, widen flexibility, and make supervision less rigid when you’re worried about overheating. You do that when you expect credit demand to weaken and you want banks to stay willing and able to lend even as the economy cools. You do it when heavy Treasury issuance needs willing buyers. And you do it when community banks, the ones most exposed to small businesses, farms, and local real estate are staring at borrowers who are already feeling stretched.

The Real Message Behind the Language

The report’s tone says all is well, but its actions say that they need more give in the system. The Fed knows the pressure points: commercial real estate valuations that haven’t fully reset, consumers who are leaning on high cost credit, nonbanks taking a larger share of lending, and a Treasury market that needs ongoing absorption. By easing rules now, they’re clearing the runway before conditions deteriorate and not after.

My Read

The Fed isn’t trying to hide stress. It’s trying to get ahead of it. The rule changes, the shifts in supervisory philosophy, the lighter touch on capital…all of that is preparation. They’re making sure the system bends rather than breaks if growth rolls over. The contradictions in the report aren’t mistakes. They’re the quiet acknowledgment that the next phase of the economy may require more flexibility than the last one.

The Federal Reserve's Supervision and Regulation Report is now available and provides information about the Fed’s supervisory and regulatory policies and actions, as well as current banking conditions. Learn more: https://t.co/aPzCjfQObZ - Federal Reserve tweet

EndGame Macro
Why MicroStrategy’s Biggest Move Isn’t Buying Bitcoin…It’s Buying Time

When a company that has spent years branding itself as a levered Bitcoin bet suddenly carves out a $1.44B cash reserve, it’s a risk management alarm.

MicroStrategy’s whole equity story has been that they’re a quasi Bitcoin ETF with operating cash flow attached. That works when BTC is ripping and capital markets are friendly. It works less well when..

• the stock is down 55% in two months,
• Bitcoin is dumping hard, and
• funding costs are much higher than in the zero rate era that birthed the strategy.

In that environment, the worst possible outcome for them is a forced seller scenario…needing dollars to service debt, meet operating needs, or roll maturities precisely when Bitcoin is puking and the equity window is shut. A USD reserve is the firebreak that’s supposed to make sure that day never comes.

So underneath all the navigate market volatility language, the message is simple…they want enough dry powder to cover interest, near term maturities, and basic corporate needs without touching the Bitcoin stack or tapping markets at distressed prices. Everything else is secondary.

Why do it now?

Timing is the tell. You don’t suddenly decide you need a $1.44B buffer at the top of a bull market with easy credit. You do it when:
• volatility has reminded you how quickly mark to market equity can evaporate;
• your stock is already in a drawdown big enough to scare new lenders; and
• you’re looking ahead at debt timelines, regulatory noise, and a macro backdrop where liquidity can vanish faster than your board can schedule an emergency meeting.

In other words, they’re looking at the same tape everyone else is, but from the inside. They see what BTC drawdowns do to their collateral cushion. They see how much of their optionality actually depends on capital markets staying open and friendly. They see the gap between the meme of being long volatility and the reality of having fixed cash obligations in a world of wild asset prices.

A USD reserve is how you quietly admit all of that without saying, “We mispriced tail risk.” You frame it as prudence, “navigating volatility,” “flexibility around guidance,” but the logic is defensive…lock in liquidity while you still can, at terms that aren’t punitive, so you’re not negotiating from your knees later.

Strip it down to the core motive

You can spin other reasons around the edges, maybe they want the option to buy back stock if it gets completely obliterated; maybe they want dry powder to buy Bitcoin on capitulation lows; maybe they’re prepping for regulatory or tax changes. Those are all plausible second order benefits.

But they’re all built on the same first order need…guarantee the company can meet its dollar obligations through a nasty cycle without being forced to dump core assets or beg the market for capital at terrible prices.

That’s the ONLY real reason you ever pre fund yourself to this scale. It’s not about getting cute with market timing. It’s about making sure you live long enough to be right.

A bitcoin reserve company is forced to set up a USD reserve

Ahhhh the irony https://t.co/MAbAJWp6nE - George Gammon
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