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 [...]
Offshore
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…
www.federalreserve.gov
Fed's balance sheet
The Federal Reserve Board of Governors in Washington DC.
Offshore
Video
EndGame Macro
This video was sent to me, I’m not even sure who made it, but the claim is that Trump’s new Strategic Bitcoin Reserve order is basically the modern version of the 1933 gold play, setting up a future revaluation of Bitcoin and gold while the dollar weakens. I’m not totally convinced, but it’s an interesting angle.
What do you all think?
tweet
This video was sent to me, I’m not even sure who made it, but the claim is that Trump’s new Strategic Bitcoin Reserve order is basically the modern version of the 1933 gold play, setting up a future revaluation of Bitcoin and gold while the dollar weakens. I’m not totally convinced, but it’s an interesting angle.
What do you all think?
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Offshore
Photo
EndGame Macro
When a Company Stops Moving, It’s Sending a Message
Meta spent the first half of the year reshuffling aggressively with people coming in, people going out, teams getting rebuilt. Then sometime after August, everything just… stops. Hiring falls off, exits fall off, and the chart goes quiet.
That silence is the tell. Companies don’t flatline like this unless they’ve moved into a hold your ground posture.
Which Teams Are Moving And What That Says About Meta’s Priorities
Engineering is clearly the center of gravity here. It dominates the chart in every month, both on the hiring side and the exit side. That’s classic we’re tightening the perimeter but still investing in the core. Everything else like HR, operations, sales, program management gets much lighter as the year goes on.
The April spike looks like a deliberate cleanup…wider exits across multiple functions, followed by a mid year rebuild where Meta selectively backfilled high priority roles. But after that, especially heading into the fall, almost every function goes quiet at the same time. That’s usually not randomness, it’s a signal of caution.
They’re not cutting deep. They’re not expanding either. They’re stabilizing.
What This Usually Means in a Broader Economic Cycle
Different parts of a company react to the economy at different speeds.
Early Movers And The Leading Indicators
• HR and recruiting slow first
• Sales and support teams lose backfills
• Marketing budgets get trimmed
• Program and consulting layers get paused
These are the roles companies flex when they’re unsure about demand.
Late Movers And The Lagging Indicators
• Engineering
• Product
• Finance
• Legal and compliance
These stay protected until a company truly believes the cycle has turned.
And right now, Meta is behaving exactly like a company that’s preparing for a slower environment without calling it a downturn. They’ve tightened non core areas, protected engineering, and pulled their hiring and exiting activity down to a low simmer.
My Read
This is what it looks like when a big firm braces quietly. Not panicking, not signaling recession, but acting like the next year is going to reward discipline more than growth.
tweet
When a Company Stops Moving, It’s Sending a Message
Meta spent the first half of the year reshuffling aggressively with people coming in, people going out, teams getting rebuilt. Then sometime after August, everything just… stops. Hiring falls off, exits fall off, and the chart goes quiet.
That silence is the tell. Companies don’t flatline like this unless they’ve moved into a hold your ground posture.
Which Teams Are Moving And What That Says About Meta’s Priorities
Engineering is clearly the center of gravity here. It dominates the chart in every month, both on the hiring side and the exit side. That’s classic we’re tightening the perimeter but still investing in the core. Everything else like HR, operations, sales, program management gets much lighter as the year goes on.
The April spike looks like a deliberate cleanup…wider exits across multiple functions, followed by a mid year rebuild where Meta selectively backfilled high priority roles. But after that, especially heading into the fall, almost every function goes quiet at the same time. That’s usually not randomness, it’s a signal of caution.
They’re not cutting deep. They’re not expanding either. They’re stabilizing.
What This Usually Means in a Broader Economic Cycle
Different parts of a company react to the economy at different speeds.
Early Movers And The Leading Indicators
• HR and recruiting slow first
• Sales and support teams lose backfills
• Marketing budgets get trimmed
• Program and consulting layers get paused
These are the roles companies flex when they’re unsure about demand.
Late Movers And The Lagging Indicators
• Engineering
• Product
• Finance
• Legal and compliance
These stay protected until a company truly believes the cycle has turned.
And right now, Meta is behaving exactly like a company that’s preparing for a slower environment without calling it a downturn. They’ve tightened non core areas, protected engineering, and pulled their hiring and exiting activity down to a low simmer.
My Read
This is what it looks like when a big firm braces quietly. Not panicking, not signaling recession, but acting like the next year is going to reward discipline more than growth.
The further interesting point with overall Meta hiring/exit trends is that it is ALL on the floor the last few months.
BTW... this is a standard trend for most companies across the board seeing a Sept forward downtrend. https://t.co/lluoeX66Iy tweet
Offshore
Photo
EndGame Macro
The Bank of England Knows What’s Coming
If you read this Financial Stability Report the way they want you to read it, everything looks steady. The Bank of England keeps repeating the same familiar phrases that they are resilient, well capitalized with manageable risks. It’s the usual central bank posture…calm voice, steady hands, nothing to see here.
But once you slow down and sit with the details, you start to feel the tension in the edges. The report is built around reassurance, yet the numbers, the caveats, and the stress scenarios tell a quieter, more anxious story. They’re not panicking but they’re not relaxed either. And they’re definitely not as confident as the headline messaging suggests.
The Quiet Worry They Have About the Dollar
The dollar sections are where their guard slips. They talk about reliance on dollar funding as if it’s just a fact of life, but the charts make it clear that access to dollar liquidity is getting harder, not easier. The cost of hedging dollars is rising. Short term FX swap funding is growing more volatile. And the maturities are stacking up in a way that leaves UK institutions exposed if global conditions tighten even a little.
They include a scenario where dollar markets seize up and funding disappears, hedging costs spike, rollover risk climbs and they present it almost like a thought experiment. But central banks don’t model scenarios they aren’t worried about. This is the kind of thing you prepare for when you know the global plumbing can clog in an instant. The Bank remembers 2008. It remembers March 2020. It remembers September 2022 when the gilt market broke in broad daylight. These what if sections are not academic; they’re preparation.
And the fact that the UK sits outside the U.S. funding core makes this more than a theoretical concern. When the dollar tightens, the UK feels it before almost anyone.
The Contradictions They Don’t Acknowledge Out Loud
The Bank says households are resilient, but the debt service ratios show a steady climb as mortgages reprice into higher rates. That’s pressure slowly building.
They say corporate risks are contained, but the refinancing wall they describe is massive, and margins are being squeezed by higher borrowing costs across whole sectors.
They say banks are well capitalized, but in the same breath they highlight rising wholesale funding needs, shorter maturities, and sensitivity to global liquidity swings. Those aren’t the markers of a system sitting comfortably.
You can feel the push pull everywhere. Reassurance at the top of the paragraph, warning signs in the footnotes. Calm language next to charts that suggest the opposite. It’s the tone of an institution that knows the surface looks fine, but the underlying momentum is shifting the wrong way.
My Read
This report reads like an institution trying to hold two truths at the same time, that the system is stable right now, but the ground beneath it is softer than anyone wants to admit. The risks are cumulative. Higher rates slowly grinding households. Corporate debt rolling into a tougher environment. Banks leaning more on short term funding. And a global dollar system that’s turning more unpredictable, right as the UK needs it the most.
They’re not forecasting a crisis. But they are quietly preparing for one. And once you read past the official tone, it becomes clear that they know how quickly being fine can turn into them being exposed when global liquidity tightens.
What I see in this report is a central bank bracing for a world that’s getting harder to navigate.
tweet
The Bank of England Knows What’s Coming
If you read this Financial Stability Report the way they want you to read it, everything looks steady. The Bank of England keeps repeating the same familiar phrases that they are resilient, well capitalized with manageable risks. It’s the usual central bank posture…calm voice, steady hands, nothing to see here.
But once you slow down and sit with the details, you start to feel the tension in the edges. The report is built around reassurance, yet the numbers, the caveats, and the stress scenarios tell a quieter, more anxious story. They’re not panicking but they’re not relaxed either. And they’re definitely not as confident as the headline messaging suggests.
The Quiet Worry They Have About the Dollar
The dollar sections are where their guard slips. They talk about reliance on dollar funding as if it’s just a fact of life, but the charts make it clear that access to dollar liquidity is getting harder, not easier. The cost of hedging dollars is rising. Short term FX swap funding is growing more volatile. And the maturities are stacking up in a way that leaves UK institutions exposed if global conditions tighten even a little.
They include a scenario where dollar markets seize up and funding disappears, hedging costs spike, rollover risk climbs and they present it almost like a thought experiment. But central banks don’t model scenarios they aren’t worried about. This is the kind of thing you prepare for when you know the global plumbing can clog in an instant. The Bank remembers 2008. It remembers March 2020. It remembers September 2022 when the gilt market broke in broad daylight. These what if sections are not academic; they’re preparation.
And the fact that the UK sits outside the U.S. funding core makes this more than a theoretical concern. When the dollar tightens, the UK feels it before almost anyone.
The Contradictions They Don’t Acknowledge Out Loud
The Bank says households are resilient, but the debt service ratios show a steady climb as mortgages reprice into higher rates. That’s pressure slowly building.
They say corporate risks are contained, but the refinancing wall they describe is massive, and margins are being squeezed by higher borrowing costs across whole sectors.
They say banks are well capitalized, but in the same breath they highlight rising wholesale funding needs, shorter maturities, and sensitivity to global liquidity swings. Those aren’t the markers of a system sitting comfortably.
You can feel the push pull everywhere. Reassurance at the top of the paragraph, warning signs in the footnotes. Calm language next to charts that suggest the opposite. It’s the tone of an institution that knows the surface looks fine, but the underlying momentum is shifting the wrong way.
My Read
This report reads like an institution trying to hold two truths at the same time, that the system is stable right now, but the ground beneath it is softer than anyone wants to admit. The risks are cumulative. Higher rates slowly grinding households. Corporate debt rolling into a tougher environment. Banks leaning more on short term funding. And a global dollar system that’s turning more unpredictable, right as the UK needs it the most.
They’re not forecasting a crisis. But they are quietly preparing for one. And once you read past the official tone, it becomes clear that they know how quickly being fine can turn into them being exposed when global liquidity tightens.
What I see in this report is a central bank bracing for a world that’s getting harder to navigate.
Our Financial Stability Report looks at the risks in our financial system and what we are doing to ensure households and businesses can rely on it.
🔗 Read here:
https://t.co/VA8VI98UjL https://t.co/mZIHWfpcvj tweet
Dimitry Nakhla | Babylon Capital®
10 Quality Stocks & CAGR Potential Based on 2028 EPS Est & Reasonable Multiples 💵
1. $V 12% | 27x
2. $SPGI 12% | 28x
3. $MSFT 12% | 29x
4. $NVDA 13% | 25x
5. $ABNB 13% | 26x
6. $MA 13% | 30x
7. $BKNG 14% | 21x
8. $ICE 14% | 25x
9. $AMZN 15% | 28x
10. $MELI 17% | 33x
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10 Quality Stocks & CAGR Potential Based on 2028 EPS Est & Reasonable Multiples 💵
1. $V 12% | 27x
2. $SPGI 12% | 28x
3. $MSFT 12% | 29x
4. $NVDA 13% | 25x
5. $ABNB 13% | 26x
6. $MA 13% | 30x
7. $BKNG 14% | 21x
8. $ICE 14% | 25x
9. $AMZN 15% | 28x
10. $MELI 17% | 33x
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Offshore
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Wasteland Capital
$NFLX announces it won the $WBD auction at $27.75 per share, +260% higher than Warner traded in April.
Huge win for shareholders, a loss for everyone else. Subscription price increases of 100%+ incoming! Plus HBO will now be 95% garbage slop.
I hope this sh*t gets blocked. https://t.co/zFgGnsYUOR
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$NFLX announces it won the $WBD auction at $27.75 per share, +260% higher than Warner traded in April.
Huge win for shareholders, a loss for everyone else. Subscription price increases of 100%+ incoming! Plus HBO will now be 95% garbage slop.
I hope this sh*t gets blocked. https://t.co/zFgGnsYUOR
tweet
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memenodes
hardwork beats talent until generational wealth walks in like a final boss https://t.co/Cy22avtI7u
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hardwork beats talent until generational wealth walks in like a final boss https://t.co/Cy22avtI7u
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