Offshore
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EndGame Macro
Why College Feels Like A Bad Idea Right Now
A lot of younger people aren’t anti education. They’re reacting to a pretty rational mismatch in the fact that the price of the credential went up like it’s a luxury product, while the job market value of a lot of white collar entry roles started acting… normal. Risky. Cyclical.
That chart says it plainly. The share of unemployed Americans with four year degrees is climbing toward the mid 20% range. When degrees were rare, a diploma was a moat. Now it’s often just the ticket to enter a crowded room.
And the lived experience matters here. If you’re 22 and you watched older siblings take on serious debt, graduate into “apply to 200 jobs” land, and then compete for roles that don’t pay enough to justify the burn… you start doing math differently. Not ideological math. Monthly payment math.
College Is a Business And It Sells What It Can, Not What You Need
Universities don’t get rewarded for aligning majors with the labor market. They get rewarded for enrollment, retention, and tuition revenue. That incentive creates a quiet problem where schools keep producing degrees for paths where demand is shrinking, getting automated, or getting squeezed by globalization while marketing those paths like the old world still exists.
It’s not that these jobs vanish overnight. It’s that the work gets unbundled. A chunk gets automated. Another chunk gets offshored. The entry level ladder gets pulled up. And suddenly the degree doesn’t buy you a career track, it buys you a shot at one.
Meanwhile, credential inflation is real. Jobs that used to train people now ask for a bachelor’s just to filter resumes. So the degree becomes a cost of entry, not a payoff. That’s the psychological break…you paid a premium price for something that feels like a minimum requirement.
Healthcare And The Trades
If you want to think like an investor, you look for demand that’s stubborn and hard to outsource. Healthcare checks that box. An aging population doesn’t pause because rates are high. Chronic disease doesn’t take a soft landing. Someone still needs to show up like nurses, techs, radiology, respiratory, PT, home health, long term care. A lot of those roles are licensed, in person, and backed by structural need. That’s not hype. That’s demographics.
The trades are similar in a different way. You can’t outsource a broken compressor, a rewiring job, a leaky pipe, or a roof. You can’t Zoom an electrician. And in many places, the pipeline of skilled tradespeople is aging out faster than it’s being replaced. Add infrastructure work, reshoring, energy retrofits, and suddenly the boring jobs look like the smart ones.
So the shift you’re seeing isn’t college is worthless. It’s more specific…the blanket promise that any degree automatically pays is breaking. The winners will be paths that connect tightly to real demand, build scarce skills, and don’t rely on a fragile white collar ladder that’s getting narrower every year.
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Why College Feels Like A Bad Idea Right Now
A lot of younger people aren’t anti education. They’re reacting to a pretty rational mismatch in the fact that the price of the credential went up like it’s a luxury product, while the job market value of a lot of white collar entry roles started acting… normal. Risky. Cyclical.
That chart says it plainly. The share of unemployed Americans with four year degrees is climbing toward the mid 20% range. When degrees were rare, a diploma was a moat. Now it’s often just the ticket to enter a crowded room.
And the lived experience matters here. If you’re 22 and you watched older siblings take on serious debt, graduate into “apply to 200 jobs” land, and then compete for roles that don’t pay enough to justify the burn… you start doing math differently. Not ideological math. Monthly payment math.
College Is a Business And It Sells What It Can, Not What You Need
Universities don’t get rewarded for aligning majors with the labor market. They get rewarded for enrollment, retention, and tuition revenue. That incentive creates a quiet problem where schools keep producing degrees for paths where demand is shrinking, getting automated, or getting squeezed by globalization while marketing those paths like the old world still exists.
It’s not that these jobs vanish overnight. It’s that the work gets unbundled. A chunk gets automated. Another chunk gets offshored. The entry level ladder gets pulled up. And suddenly the degree doesn’t buy you a career track, it buys you a shot at one.
Meanwhile, credential inflation is real. Jobs that used to train people now ask for a bachelor’s just to filter resumes. So the degree becomes a cost of entry, not a payoff. That’s the psychological break…you paid a premium price for something that feels like a minimum requirement.
Healthcare And The Trades
If you want to think like an investor, you look for demand that’s stubborn and hard to outsource. Healthcare checks that box. An aging population doesn’t pause because rates are high. Chronic disease doesn’t take a soft landing. Someone still needs to show up like nurses, techs, radiology, respiratory, PT, home health, long term care. A lot of those roles are licensed, in person, and backed by structural need. That’s not hype. That’s demographics.
The trades are similar in a different way. You can’t outsource a broken compressor, a rewiring job, a leaky pipe, or a roof. You can’t Zoom an electrician. And in many places, the pipeline of skilled tradespeople is aging out faster than it’s being replaced. Add infrastructure work, reshoring, energy retrofits, and suddenly the boring jobs look like the smart ones.
So the shift you’re seeing isn’t college is worthless. It’s more specific…the blanket promise that any degree automatically pays is breaking. The winners will be paths that connect tightly to real demand, build scarce skills, and don’t rely on a fragile white collar ladder that’s getting narrower every year.
College education value is collapsing https://t.co/iO9UpUIt5m tweet
Offshore
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Quiver Quantitative
JUST IN: Representative Melanie Stansbury will sign Rep. Luna's discharge petition to force a vote on a congressional stock trading ban.
Now at 17 signatures. https://t.co/EL9mG77Jm3
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JUST IN: Representative Melanie Stansbury will sign Rep. Luna's discharge petition to force a vote on a congressional stock trading ban.
Now at 17 signatures. https://t.co/EL9mG77Jm3
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Offshore
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Wasteland Capital
Apart from my earnings reviews, I’ve only tweeted five new cases on here over the last year.
They ended up the #1 Mag7 YTD $GOOG, the #1 Semi YTD $MU & #1 China LargeCap YTD $BABA. Plus 2 🚀 smallcaps, $AEO & $LYFT
Average return +111% currently.
Less is more, as they say. https://t.co/LGr5bglq7t
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Apart from my earnings reviews, I’ve only tweeted five new cases on here over the last year.
They ended up the #1 Mag7 YTD $GOOG, the #1 Semi YTD $MU & #1 China LargeCap YTD $BABA. Plus 2 🚀 smallcaps, $AEO & $LYFT
Average return +111% currently.
Less is more, as they say. https://t.co/LGr5bglq7t
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Offshore
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EndGame Macro
When High Valuations Meet Rising Unemployment, Something Has to Give
This chart looks complicated, but the message is pretty simple. The black line up top….the 5 year CAPE smooths out the noise and shows you how expensive the market really is relative to earnings. Sitting near 32, it’s in territory you only see when investors are pricing in a very optimistic future like in the late 90s, the post COVID boom, and a handful of mid century peaks. Those periods didn’t always end in a crash, but they almost always led to years where returns came in weaker than hoped because so much optimism was already baked into the price.
In plain terms we’re paying premium prices for earnings that haven’t arrived yet.
The lower half of the chart, the equity risk premium makes that clearer. Most versions barely compensate you for taking equity risk over simply sitting in bonds. And the simplest measure, earnings yield minus the risk free rate, is basically flat. When unemployment is rising and growth is cooling, that’s not a great cushion. Models can assume strong future earnings, but the real economy doesn’t care about those assumptions once the cycle turns.
Where the Pressure Builds in a Downturn
High valuations can float for a while, but they become extremely sensitive once the macro tone shifts. Rising unemployment pushes companies to cut hours, freeze hiring, and protect margins. Earnings expectations start sliding. And from a CAPE of 32, the market doesn’t have much room to take a punch.
In a stronger environment, falling long term rates might soften the blow. But if we slide into recession and long yields stay sticky whether because of fiscal pressure, heavy issuance, or lingering inflation expectations you get the worst mix where earnings weaken while the discount rate refuses to give you relief. That’s when valuations find air pockets.
And even if the Fed responds with more sustained cuts or even QE, that doesn’t stop the downside immediately. We’ve seen this before. In 2008–09, the Fed unleashed QE and slashed rates to zero and stocks kept falling, unemployment kept climbing, and the real economy kept deteriorating. Liquidity shows up in the financial pipes instantly, but it doesn’t reach Main Street for 18–24 months. During that lag, markets can still reprice lower because the recession mechanics are still grinding forward.
That’s why fragility replaces optimism in this kind of environment. Investors shift from asking “How high can this go?” to “How much am I being paid to take this risk?” And based on this chart, the answer is: not much.
My Honest Read
This chart doesn’t just whisper asymmetry with unemployment rising and recession signals stacking up, it says it outright. The upside narrows because valuations are already stretched. The downside widens because earnings are likely to soften, and the cushion underneath is thin.
This isn’t predicting a crash. It’s acknowledging that when you enter a downturn from one of the most expensive starting points in history, the margin for error is tiny. And even aggressive Fed easing doesn’t flip the cycle instantly, history shows the market can continue falling while policy is easing, simply because the real economy hasn’t finished correcting.
In that kind of backdrop, today’s stability feels less like strength and more like veneer. A high gloss surface covering cracks beneath it. And veneer eventually gives way, not because markets panic, but because the fundamentals finally pull the price back to where the cycle says it belongs.
tweet
When High Valuations Meet Rising Unemployment, Something Has to Give
This chart looks complicated, but the message is pretty simple. The black line up top….the 5 year CAPE smooths out the noise and shows you how expensive the market really is relative to earnings. Sitting near 32, it’s in territory you only see when investors are pricing in a very optimistic future like in the late 90s, the post COVID boom, and a handful of mid century peaks. Those periods didn’t always end in a crash, but they almost always led to years where returns came in weaker than hoped because so much optimism was already baked into the price.
In plain terms we’re paying premium prices for earnings that haven’t arrived yet.
The lower half of the chart, the equity risk premium makes that clearer. Most versions barely compensate you for taking equity risk over simply sitting in bonds. And the simplest measure, earnings yield minus the risk free rate, is basically flat. When unemployment is rising and growth is cooling, that’s not a great cushion. Models can assume strong future earnings, but the real economy doesn’t care about those assumptions once the cycle turns.
Where the Pressure Builds in a Downturn
High valuations can float for a while, but they become extremely sensitive once the macro tone shifts. Rising unemployment pushes companies to cut hours, freeze hiring, and protect margins. Earnings expectations start sliding. And from a CAPE of 32, the market doesn’t have much room to take a punch.
In a stronger environment, falling long term rates might soften the blow. But if we slide into recession and long yields stay sticky whether because of fiscal pressure, heavy issuance, or lingering inflation expectations you get the worst mix where earnings weaken while the discount rate refuses to give you relief. That’s when valuations find air pockets.
And even if the Fed responds with more sustained cuts or even QE, that doesn’t stop the downside immediately. We’ve seen this before. In 2008–09, the Fed unleashed QE and slashed rates to zero and stocks kept falling, unemployment kept climbing, and the real economy kept deteriorating. Liquidity shows up in the financial pipes instantly, but it doesn’t reach Main Street for 18–24 months. During that lag, markets can still reprice lower because the recession mechanics are still grinding forward.
That’s why fragility replaces optimism in this kind of environment. Investors shift from asking “How high can this go?” to “How much am I being paid to take this risk?” And based on this chart, the answer is: not much.
My Honest Read
This chart doesn’t just whisper asymmetry with unemployment rising and recession signals stacking up, it says it outright. The upside narrows because valuations are already stretched. The downside widens because earnings are likely to soften, and the cushion underneath is thin.
This isn’t predicting a crash. It’s acknowledging that when you enter a downturn from one of the most expensive starting points in history, the margin for error is tiny. And even aggressive Fed easing doesn’t flip the cycle instantly, history shows the market can continue falling while policy is easing, simply because the real economy hasn’t finished correcting.
In that kind of backdrop, today’s stability feels less like strength and more like veneer. A high gloss surface covering cracks beneath it. And veneer eventually gives way, not because markets panic, but because the fundamentals finally pull the price back to where the cycle says it belongs.
tweet
Offshore
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EndGame Macro
A Fourth Turning in Real Time: What the Dollar’s Collapse in Buying Power Really Signals
The top panel shows what $100 from 1792 looks like today, adjusted for inflation. It climbs almost vertically in the modern era. The bottom panel flips it to how much buying power that same $100 has over time. It rises and falls a bit in the early Republic, but after the creation of the Fed, the Gold Reserve Act, the world wars, and finally the Nixon shock, it’s a long slide toward zero.
So the insinuation isn’t just inflation bad. It’s that every time the U.S. has faced a big stress event like a war, depression, financial crisis the answer has been some combination of more credit, more centralization, more flexibility in the currency… and the quiet cost is that each generation’s dollars buy a little less. Politicians come in after the fact and promise reform, but the deeper architecture keeps nudging in the same direction: sacrifice currency stability to preserve political and geopolitical stability.
Monroe Doctrine 2.0 and defending the top of the pyramid
Once you see the dollar that way not just as money but as a power tool, the foreign policy piece starts to line up.
The original Monroe Doctrine said, in plain language: the Western Hemisphere is our backyard. Today it isn’t formally branded that way, but the behavior rhymes. You’ve got a heavier U.S. security footprint around the Caribbean and northern South America, more pressure on unfriendly regimes, and a push to keep Chinese and Russian influence from locking down ports, resources, or telecoms in the region.
At the same time, BRICS and other blocs are experimenting with ways to trade more in local currencies, build alternative payment rails, and reduce exposure to U.S. sanctions and SWIFT controls. Even if those experiments are clumsy and slow, the intent is clear: carve out some space from a dollar system that has been used, repeatedly, as a lever of coercion.
Viewed through that lens, Monroe Doctrine 2.0 is about more than ships and sanctions. It’s the U.S. trying to keep regional control at the exact moment the rest of the world is quietly testing escape hatches from a dollar centric order, an order that, domestically, shows up in charts like this as slow motion debasement.
A Fourth Turning kind of moment
That’s why this all feels like a Fourth Turning phase. Institutions are distrusted. The middle class feels squeezed by a cost of living curve that never seems to flatten. The global system built after 1945 looks less like a guarantee and more like a negotiation, sometimes a threat.
Inside the country, the solution keeps being more debt and more intervention. Outside the country, the solution is to reassert spheres of influence and defend the currency’s central role by any means necessary whether it be financial, legal, military or diplomatic.
The chart is doing more than mocking politicians. It’s saying…the long arc of policy choices has eroded the currency at home to maintain power abroad, and now both fronts are under strain at the same time. That’s exactly the kind of pressure cooker environment that tends to produce inflection points where systems either reinvent themselves or double down on the very behaviors that got them here.
tweet
A Fourth Turning in Real Time: What the Dollar’s Collapse in Buying Power Really Signals
The top panel shows what $100 from 1792 looks like today, adjusted for inflation. It climbs almost vertically in the modern era. The bottom panel flips it to how much buying power that same $100 has over time. It rises and falls a bit in the early Republic, but after the creation of the Fed, the Gold Reserve Act, the world wars, and finally the Nixon shock, it’s a long slide toward zero.
So the insinuation isn’t just inflation bad. It’s that every time the U.S. has faced a big stress event like a war, depression, financial crisis the answer has been some combination of more credit, more centralization, more flexibility in the currency… and the quiet cost is that each generation’s dollars buy a little less. Politicians come in after the fact and promise reform, but the deeper architecture keeps nudging in the same direction: sacrifice currency stability to preserve political and geopolitical stability.
Monroe Doctrine 2.0 and defending the top of the pyramid
Once you see the dollar that way not just as money but as a power tool, the foreign policy piece starts to line up.
The original Monroe Doctrine said, in plain language: the Western Hemisphere is our backyard. Today it isn’t formally branded that way, but the behavior rhymes. You’ve got a heavier U.S. security footprint around the Caribbean and northern South America, more pressure on unfriendly regimes, and a push to keep Chinese and Russian influence from locking down ports, resources, or telecoms in the region.
At the same time, BRICS and other blocs are experimenting with ways to trade more in local currencies, build alternative payment rails, and reduce exposure to U.S. sanctions and SWIFT controls. Even if those experiments are clumsy and slow, the intent is clear: carve out some space from a dollar system that has been used, repeatedly, as a lever of coercion.
Viewed through that lens, Monroe Doctrine 2.0 is about more than ships and sanctions. It’s the U.S. trying to keep regional control at the exact moment the rest of the world is quietly testing escape hatches from a dollar centric order, an order that, domestically, shows up in charts like this as slow motion debasement.
A Fourth Turning kind of moment
That’s why this all feels like a Fourth Turning phase. Institutions are distrusted. The middle class feels squeezed by a cost of living curve that never seems to flatten. The global system built after 1945 looks less like a guarantee and more like a negotiation, sometimes a threat.
Inside the country, the solution keeps being more debt and more intervention. Outside the country, the solution is to reassert spheres of influence and defend the currency’s central role by any means necessary whether it be financial, legal, military or diplomatic.
The chart is doing more than mocking politicians. It’s saying…the long arc of policy choices has eroded the currency at home to maintain power abroad, and now both fronts are under strain at the same time. That’s exactly the kind of pressure cooker environment that tends to produce inflection points where systems either reinvent themselves or double down on the very behaviors that got them here.
Politicians are like “we’re going to fix this” https://t.co/QG13MEOguW tweet
Offshore
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EndGame Macro
When Interest Becomes the Budget And The Line Washington Can’t Ignore
The blue line is telling you how much of the federal budget is now going toward interest payments. Not the debt in theory, the actual cash going out the door. And because the government rolls its debt over time, there’s a built in delay. Higher rates don’t hurt instantly; they seep in. What we’re seeing now is simply the consequence of the last few years finally catching up.
That’s why the blue line feels so ominous. It’s not reacting to today’s yields, it’s reacting to the entire rate cycle that already happened.
The Last Time We Were Here
The early to mid 1990s is the closest historical echo. Interest costs were eating a similar share of the budget, and Washington felt the squeeze. But the way out wasn’t some clever policy trick. It was a mix of luck, timing, and a little bit of global intervention.
Inflation fell. The Fed eased. Growth picked up. Tax revenues rose. And for a brief moment, there was real political willingness to tighten the belt. All of that helped but there’s a detail people forget…
The Plaza Accord. In 1985, the major economic powers of the time coordinated to push down an overvalued dollar because it was suffocating U.S. competitiveness. The weaker dollar helped set the stage for easier financial conditions and the long 1990s expansion that followed.
The blue line eventually collapsed. But it did so because everything lined up at once: disinflation, lower rates, strong growth, better budgets and crucially, a world willing to cooperate with U.S. needs.
That world doesn’t exist today.
What It Means If the Blue Line Keeps Rising
If interest keeps taking a bigger bite out of the budget, it stops being just a fiscal issue and starts becoming a political and strategic one. At some point, interest payments behave like an unplanned tax, money you can’t spend on defense, healthcare, or anything voters actually notice.
And then the choices narrow fast.
You either do the painful stuff…spending cuts, tax hikes, entitlement changes or you slide into the quieter, more familiar option of financial repression. Keep rates lower than they should be. Manage the curve. Encourage institutions to hold Treasuries. Use policy tools to make the debt easier to carry over time.
That’s the path countries choose when math corners them.
And even if the Fed cuts aggressively, the blue line doesn’t fall right away. We’ve lived through that playbook. In 2008–09 the Fed went to zero, launched QE, and markets still fell while unemployment rose. Liquidity hits the pipes immediately; the real economy moves on its own timetable.
Where This Likely Goes
If the blue line keeps rising, we shift from a world where policy is about optimizing the economy to a world where policy is about managing the financing of the government itself. That usually means more volatility, louder fights over budgets, and a steady gravitational pull toward easier money not because anyone prefers it, but because the alternative is facing the pain head on.
The 1990s had an escape hatch with a global accord that weakened the dollar and gave the U.S. breathing room.
Today, the U.S. is operating in a far more fractured world with far fewer allies willing to coordinate in the same way.
And that’s what makes this version of the blue line feel heavier. It’s not just about interest costs rising, it’s about the shrinking list of ways to bring them back down.
tweet
When Interest Becomes the Budget And The Line Washington Can’t Ignore
The blue line is telling you how much of the federal budget is now going toward interest payments. Not the debt in theory, the actual cash going out the door. And because the government rolls its debt over time, there’s a built in delay. Higher rates don’t hurt instantly; they seep in. What we’re seeing now is simply the consequence of the last few years finally catching up.
That’s why the blue line feels so ominous. It’s not reacting to today’s yields, it’s reacting to the entire rate cycle that already happened.
The Last Time We Were Here
The early to mid 1990s is the closest historical echo. Interest costs were eating a similar share of the budget, and Washington felt the squeeze. But the way out wasn’t some clever policy trick. It was a mix of luck, timing, and a little bit of global intervention.
Inflation fell. The Fed eased. Growth picked up. Tax revenues rose. And for a brief moment, there was real political willingness to tighten the belt. All of that helped but there’s a detail people forget…
The Plaza Accord. In 1985, the major economic powers of the time coordinated to push down an overvalued dollar because it was suffocating U.S. competitiveness. The weaker dollar helped set the stage for easier financial conditions and the long 1990s expansion that followed.
The blue line eventually collapsed. But it did so because everything lined up at once: disinflation, lower rates, strong growth, better budgets and crucially, a world willing to cooperate with U.S. needs.
That world doesn’t exist today.
What It Means If the Blue Line Keeps Rising
If interest keeps taking a bigger bite out of the budget, it stops being just a fiscal issue and starts becoming a political and strategic one. At some point, interest payments behave like an unplanned tax, money you can’t spend on defense, healthcare, or anything voters actually notice.
And then the choices narrow fast.
You either do the painful stuff…spending cuts, tax hikes, entitlement changes or you slide into the quieter, more familiar option of financial repression. Keep rates lower than they should be. Manage the curve. Encourage institutions to hold Treasuries. Use policy tools to make the debt easier to carry over time.
That’s the path countries choose when math corners them.
And even if the Fed cuts aggressively, the blue line doesn’t fall right away. We’ve lived through that playbook. In 2008–09 the Fed went to zero, launched QE, and markets still fell while unemployment rose. Liquidity hits the pipes immediately; the real economy moves on its own timetable.
Where This Likely Goes
If the blue line keeps rising, we shift from a world where policy is about optimizing the economy to a world where policy is about managing the financing of the government itself. That usually means more volatility, louder fights over budgets, and a steady gravitational pull toward easier money not because anyone prefers it, but because the alternative is facing the pain head on.
The 1990s had an escape hatch with a global accord that weakened the dollar and gave the U.S. breathing room.
Today, the U.S. is operating in a far more fractured world with far fewer allies willing to coordinate in the same way.
And that’s what makes this version of the blue line feel heavier. It’s not just about interest costs rising, it’s about the shrinking list of ways to bring them back down.
Treasury can’t afford a rise in financing costs: interest already consumes ~14% of federal outlays.
https://t.co/BV8OiX9foY https://t.co/j7j9wvrmz4 tweet
Offshore
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Clark Square Capital
I wrote up a review of the alt-data software @tickerplus TickerTrends. You can check it out here:
https://t.co/NAy15kcBSD
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I wrote up a review of the alt-data software @tickerplus TickerTrends. You can check it out here:
https://t.co/NAy15kcBSD
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Offshore
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EndGame Macro
Low Claims, Slow Cracks And The Labor Market’s Most Misleading Signal
This chart only measures one thing…how many people got laid off this week and immediately filed for unemployment insurance. And on that narrow metric, the number is undeniably low, the lowest since late 2022. If you look at it in isolation, it doesn’t give you the feeling of an economy unraveling.
But initial claims are a late cycle indicator. They stay quiet right up until companies stop trying to hold on to workers. A low print doesn’t mean the labor market is strong; it just means layoffs haven’t gone broad yet.
Why Claims Can Stay Low Even When the Labor Market Feels Tight
The most realistic explanation is that we’re in the slow adjustment phase of the cycle, the part where firms soften everything except the payroll count. Instead of cutting people outright, companies freeze hiring, trim hours, cancel open roles, and shift more work toward contractors or gig arrangements. That creates real stress for workers, but it doesn’t show up as new claims.
Claims also miss large parts of the workforce. Gig workers, many contractors, and anyone without traditional W-2 earnings aren’t eligible for unemployment benefits, so they never appear in this data. If these groups are the first to feel the downturn and they often are then initial claims will stay artificially calm.
And then there’s the reporting element. Weekly claims are noisy by nature. Holidays, seasonal adjustments, and administrative timing can all produce one off declines that don’t reflect the broader trend.
The More Honest Read
A low claims number doesn’t mean the economy is fine. It means layoffs aren’t widespread yet. If the slowdown is real and plenty of other indicators are pointing that direction then the weakness usually shows up first in slower hiring, longer job searches, and quiet reductions in hours. Claims are the last shoe to drop.
So this chart isn’t telling you there is no distress. It’s telling you we’re still early in the adjustment phase, where the pain is real but still hidden in places this metric isn’t built to capture.
tweet
Low Claims, Slow Cracks And The Labor Market’s Most Misleading Signal
This chart only measures one thing…how many people got laid off this week and immediately filed for unemployment insurance. And on that narrow metric, the number is undeniably low, the lowest since late 2022. If you look at it in isolation, it doesn’t give you the feeling of an economy unraveling.
But initial claims are a late cycle indicator. They stay quiet right up until companies stop trying to hold on to workers. A low print doesn’t mean the labor market is strong; it just means layoffs haven’t gone broad yet.
Why Claims Can Stay Low Even When the Labor Market Feels Tight
The most realistic explanation is that we’re in the slow adjustment phase of the cycle, the part where firms soften everything except the payroll count. Instead of cutting people outright, companies freeze hiring, trim hours, cancel open roles, and shift more work toward contractors or gig arrangements. That creates real stress for workers, but it doesn’t show up as new claims.
Claims also miss large parts of the workforce. Gig workers, many contractors, and anyone without traditional W-2 earnings aren’t eligible for unemployment benefits, so they never appear in this data. If these groups are the first to feel the downturn and they often are then initial claims will stay artificially calm.
And then there’s the reporting element. Weekly claims are noisy by nature. Holidays, seasonal adjustments, and administrative timing can all produce one off declines that don’t reflect the broader trend.
The More Honest Read
A low claims number doesn’t mean the economy is fine. It means layoffs aren’t widespread yet. If the slowdown is real and plenty of other indicators are pointing that direction then the weakness usually shows up first in slower hiring, longer job searches, and quiet reductions in hours. Claims are the last shoe to drop.
So this chart isn’t telling you there is no distress. It’s telling you we’re still early in the adjustment phase, where the pain is real but still hidden in places this metric isn’t built to capture.
Initial jobless claims just fell to the lowest since Sept. 2022. Not screaming distress. https://t.co/guxioKpVLx tweet
AkhenOsiris
$GOOGL OpenAI Anthropic
Prince specifically highlighted concerns about Google’s policies around its search and AI crawlers. As a major AI player jostling for dominance, Google combined its search and AI crawlers into one, so blocking its AI scraper also blocks a site’s ability to be indexed in Google search.
Prince cites stats that Cloudflare has not previously shared publicly about how much more of the internet Google can see compared to other companies like OpenAI and Anthropic or even Meta and Microsoft. Prince says Cloudflare found that Google currently sees 3.2 times more pages on the internet than OpenAI, 4.6 times more than Microsoft, and 4.8 times more than Anthropic or Meta does. Put simply, “they have this incredibly privileged access,” Prince says.
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$GOOGL OpenAI Anthropic
Prince specifically highlighted concerns about Google’s policies around its search and AI crawlers. As a major AI player jostling for dominance, Google combined its search and AI crawlers into one, so blocking its AI scraper also blocks a site’s ability to be indexed in Google search.
Prince cites stats that Cloudflare has not previously shared publicly about how much more of the internet Google can see compared to other companies like OpenAI and Anthropic or even Meta and Microsoft. Prince says Cloudflare found that Google currently sees 3.2 times more pages on the internet than OpenAI, 4.6 times more than Microsoft, and 4.8 times more than Anthropic or Meta does. Put simply, “they have this incredibly privileged access,” Prince says.
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Offshore
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Clark Square Capital
Henry Ellenbogen makes a compelling case for investing in small caps... https://t.co/KufOLkLRQH
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Henry Ellenbogen makes a compelling case for investing in small caps... https://t.co/KufOLkLRQH
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EndGame Macro
You’re Watching the Wrong Number…The Stress Is Hidden in the Plumbing
This week’s H.4.1 doesn’t deliver a dramatic headline. The Fed’s balance sheet barely moved, down about $16B, still sitting near $6.5T. But the details beneath that surface are far more revealing. The Fed isn’t tightening anymore, but it also isn’t easing in the way markets often imagine. It’s managing a system that’s getting more delicate to steer.
And now that QT is officially over and another rate cut is expected in a few days, the story becomes less about size and more about how liquidity is shifting inside the system.
What Actually Changed This Week
Securities Are Slowly Eroding
Outright holdings fell about $2.5B, mostly Treasuries. Weekly averages show a larger decline for both Treasuries and MBS. This isn’t a new policy move, it’s just runoff and amortization. But it underscores one thing: the Fed is done adding duration, and the portfolio’s income power will only recover slowly.
Reserves Dropped Again
Bank reserves fell almost $20B on the Wednesday reading and more than $38B on the weekly average. That’s a meaningful drain especially considering QT just ended. It’s a reminder that flows, not policy settings, drive liquidity now.
The TGA Jumped
Treasury’s account at the Fed climbed more than $33B on the weekly average. Every dollar that moves into the TGA drains reserves. That’s one of the cleanest ways liquidity evaporates, and it explains much of the reserve decline.
RRP Is Still Sticky
Reverse repo balances are holding around $330B. Money funds still prefer parking cash with the Fed rather than lending in the private market. When RRP refuses to fall, it’s a sign of lingering caution.
Repo Usage Flared And Then Disappeared
On the Wednesday snapshot, repo looks like zero. But the weekly average shows meaningful activity earlier in the week. That’s the Fed smoothing funding conditions and quietly stepping in when things tighten, stepping back when they stabilize. The tape notices even if the headlines don’t.
How the Fed’s Policy Pivot Fits In
QT ended on December 1, maturing securities are now reinvested, and another rate cut is widely expected. The Fed has clearly shifted from draining liquidity to trying to stabilize it. But ending QT doesn’t automatically ease conditions. With TGA rising and RRP still attracting cash, reserves can still fall even in an easing environment.
This is the new regime with a balance sheet that’s held steady, while liquidity inside it keeps shifting.
What Actually Worries Me
A Massive Deferred Loss Still Hangs Over Everything
The Fed is carrying roughly -$243B in deferred remittances. It doesn’t affect operations, but it matters politically and optically and it quietly creates an incentive structure where lower short term rates help repair the hole faster.
The Duration Trap
The Fed holds a huge amount of long dated securities. Most of the MBS book and $1.6T in Treasuries mature in more than 10 years. That means asset yields adjust painfully slowly. Even with cuts, the Fed’s income recovery is glacial.
Liquidity Is Becoming Uneven
This week shows a pattern of…
• reserves falling
• TGA rising
• RRP refusing to drain
• repo flickering in the background
Not signs of crisis, signs of a system that’s operating with less slack.
My Read
The balance sheet isn’t giving a big, dramatic warning. It’s giving a quiet, structural one.
We’re entering a period where…
• the size of the balance sheet matters less
• the distribution of liquidity matters more
• reserves will be the pressure point
• and the Fed will use tactical tools (repos, lending, reinvestments) to prevent small cracks from turning into bigger ones
Rate cuts won’t automatically fix these pressures if TGA and RRP keep absorbing cash that banks need.
The message underneath the numbers is simple…
Watch the plumbing. That’s where the next shift will show up first.
Interactive guide to our weekly [...]
You’re Watching the Wrong Number…The Stress Is Hidden in the Plumbing
This week’s H.4.1 doesn’t deliver a dramatic headline. The Fed’s balance sheet barely moved, down about $16B, still sitting near $6.5T. But the details beneath that surface are far more revealing. The Fed isn’t tightening anymore, but it also isn’t easing in the way markets often imagine. It’s managing a system that’s getting more delicate to steer.
And now that QT is officially over and another rate cut is expected in a few days, the story becomes less about size and more about how liquidity is shifting inside the system.
What Actually Changed This Week
Securities Are Slowly Eroding
Outright holdings fell about $2.5B, mostly Treasuries. Weekly averages show a larger decline for both Treasuries and MBS. This isn’t a new policy move, it’s just runoff and amortization. But it underscores one thing: the Fed is done adding duration, and the portfolio’s income power will only recover slowly.
Reserves Dropped Again
Bank reserves fell almost $20B on the Wednesday reading and more than $38B on the weekly average. That’s a meaningful drain especially considering QT just ended. It’s a reminder that flows, not policy settings, drive liquidity now.
The TGA Jumped
Treasury’s account at the Fed climbed more than $33B on the weekly average. Every dollar that moves into the TGA drains reserves. That’s one of the cleanest ways liquidity evaporates, and it explains much of the reserve decline.
RRP Is Still Sticky
Reverse repo balances are holding around $330B. Money funds still prefer parking cash with the Fed rather than lending in the private market. When RRP refuses to fall, it’s a sign of lingering caution.
Repo Usage Flared And Then Disappeared
On the Wednesday snapshot, repo looks like zero. But the weekly average shows meaningful activity earlier in the week. That’s the Fed smoothing funding conditions and quietly stepping in when things tighten, stepping back when they stabilize. The tape notices even if the headlines don’t.
How the Fed’s Policy Pivot Fits In
QT ended on December 1, maturing securities are now reinvested, and another rate cut is widely expected. The Fed has clearly shifted from draining liquidity to trying to stabilize it. But ending QT doesn’t automatically ease conditions. With TGA rising and RRP still attracting cash, reserves can still fall even in an easing environment.
This is the new regime with a balance sheet that’s held steady, while liquidity inside it keeps shifting.
What Actually Worries Me
A Massive Deferred Loss Still Hangs Over Everything
The Fed is carrying roughly -$243B in deferred remittances. It doesn’t affect operations, but it matters politically and optically and it quietly creates an incentive structure where lower short term rates help repair the hole faster.
The Duration Trap
The Fed holds a huge amount of long dated securities. Most of the MBS book and $1.6T in Treasuries mature in more than 10 years. That means asset yields adjust painfully slowly. Even with cuts, the Fed’s income recovery is glacial.
Liquidity Is Becoming Uneven
This week shows a pattern of…
• reserves falling
• TGA rising
• RRP refusing to drain
• repo flickering in the background
Not signs of crisis, signs of a system that’s operating with less slack.
My Read
The balance sheet isn’t giving a big, dramatic warning. It’s giving a quiet, structural one.
We’re entering a period where…
• the size of the balance sheet matters less
• the distribution of liquidity matters more
• reserves will be the pressure point
• and the Fed will use tactical tools (repos, lending, reinvestments) to prevent small cracks from turning into bigger ones
Rate cuts won’t automatically fix these pressures if TGA and RRP keep absorbing cash that banks need.
The message underneath the numbers is simple…
Watch the plumbing. That’s where the next shift will show up first.
Interactive guide to our weekly [...]