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EndGame Macro
The Chart That Explains Why Regulators Are Quietly Rearranging the Safety Nets
This chart shows cash as a share of total assets for small banks and big banks over the last 15+ years. When those lines rise, banks have slack. When they fall, the system is running tighter.
What stands out now is how both groups have drifted back toward the leaner levels we saw before COVID. Big banks, especially, have watched their cash cushions fade as the cycle shifted, rates stayed high, and deposits reshuffled. Small banks aren’t collapsing, but they’re not sitting on excess liquidity either and for them, running with less cash makes every hit from commercial real estate or refinancing pressure feel a little heavier.
Why It Matters Right Now
This is where the regulatory changes fit perfectly. The eSLR loosening for the biggest banks basically gives them more room on their balance sheets by reducing how much capital they need to hold against total assets, regardless of risk. In practice, it means they can step in during periods of heavy Treasury issuance or market stress without immediately bumping into a regulatory ceiling. It’s a way of saying, that they need them available. And don’t let capital rules keep you on the sidelines.
On the other side, the lowered CBLR for community banks drops the required leverage ratio from 9% to 8% and gives them a longer grace window if they fall below the threshold. That may sound small, but for smaller banks especially those tied up in CRE loans or dealing with rising refinancing costs that extra percent of flexibility is meaningful. It means they don’t have to shrink their balance sheets or cut lending right when their local economies can’t afford it.
This chart is saying the system is tight, and tight systems don’t have the luxury of absorbing stress without help. The rule changes are the quiet acknowledgement of that reality. They’re setting up the scaffolding ahead of time, the kind you build when you want things to bend for a few years, not snap all at once.
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The Chart That Explains Why Regulators Are Quietly Rearranging the Safety Nets
This chart shows cash as a share of total assets for small banks and big banks over the last 15+ years. When those lines rise, banks have slack. When they fall, the system is running tighter.
What stands out now is how both groups have drifted back toward the leaner levels we saw before COVID. Big banks, especially, have watched their cash cushions fade as the cycle shifted, rates stayed high, and deposits reshuffled. Small banks aren’t collapsing, but they’re not sitting on excess liquidity either and for them, running with less cash makes every hit from commercial real estate or refinancing pressure feel a little heavier.
Why It Matters Right Now
This is where the regulatory changes fit perfectly. The eSLR loosening for the biggest banks basically gives them more room on their balance sheets by reducing how much capital they need to hold against total assets, regardless of risk. In practice, it means they can step in during periods of heavy Treasury issuance or market stress without immediately bumping into a regulatory ceiling. It’s a way of saying, that they need them available. And don’t let capital rules keep you on the sidelines.
On the other side, the lowered CBLR for community banks drops the required leverage ratio from 9% to 8% and gives them a longer grace window if they fall below the threshold. That may sound small, but for smaller banks especially those tied up in CRE loans or dealing with rising refinancing costs that extra percent of flexibility is meaningful. It means they don’t have to shrink their balance sheets or cut lending right when their local economies can’t afford it.
This chart is saying the system is tight, and tight systems don’t have the luxury of absorbing stress without help. The rule changes are the quiet acknowledgement of that reality. They’re setting up the scaffolding ahead of time, the kind you build when you want things to bend for a few years, not snap all at once.
Liquidity constraints at both large and small banks are likely reflecting the downward movement of bank reserves; definitely worth keeping an eye on in coming months since this will hit critical levels soon if the current sharp downward trend in relative liquidity continues: https://t.co/DFHeFCuOgB tweet
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WealthyReadings
I did not have a $DUOL x Genshin Impact partnership on my bingo card.
That being said, why not?
Duolingo isn't just a teaching method, it's a game & it has a lot of similarities with Genshin Impact in terms of player acquisition & retention.
Soon to be a gacha full of waifus. https://t.co/6k5oMI9Jw5
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I did not have a $DUOL x Genshin Impact partnership on my bingo card.
That being said, why not?
Duolingo isn't just a teaching method, it's a game & it has a lot of similarities with Genshin Impact in terms of player acquisition & retention.
Soon to be a gacha full of waifus. https://t.co/6k5oMI9Jw5
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Offshore
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EndGame Macro
Canada May Look Like It’s Turning But The U.S. Labor Market Doesn’t Always Follow on Cue
The chart is basically pointing out that Canada and the U.S. tend to move through the job market cycle together. When demand cools, both soften. When things pick back up, both improve. That part of the relationship is real. But the timing is never perfect. Canada swings harder because its economy is more rate sensitive, more housing driven, and more exposed to commodities. Sometimes it turns first, sometimes it lags, sometimes the two economies simply drift apart for a bit.
Canada’s recent move lower is interesting. But it’s not a guarantee the U.S. follows right behind it. At best, it’s a nudge, not a signal.
What History Tells You About Rate Cuts and Unemployment
The these charts below I pulled up show something we forget in the moment that when the Fed starts a true easing cycle, unemployment usually doesn’t fall right away. It rises. Not because the cuts make things worse, but because the Fed only cuts aggressively when the turn in the labor market is already underway.
You can see it in the early 2000s. Rates came down fast, but unemployment kept rising before it finally rolled over. Same story in the GFC. Policy went to zero in a hurry, but job losses kept piling up before the bottom formed. The labor market responds with a lag, and cutting rates doesn’t skip that part of the process.
My Read on What’s Happening Now
Canada improving might end up being a temporary blip. The better gauge for where the U.S. goes next is what’s happening underneath the headline numbers like hours worked, continuing claims, and the steady rise in layoffs that don’t always hit the front page. If those stay soft, the historical pattern tends to hold that when easing begins, unemployment often moves up before it moves down.
It’s not the most exciting conclusion, but it’s the honest one. The chart shows the relationship. History shows the rhythm. And the present looks like a moment where we should respect both.
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Canada May Look Like It’s Turning But The U.S. Labor Market Doesn’t Always Follow on Cue
The chart is basically pointing out that Canada and the U.S. tend to move through the job market cycle together. When demand cools, both soften. When things pick back up, both improve. That part of the relationship is real. But the timing is never perfect. Canada swings harder because its economy is more rate sensitive, more housing driven, and more exposed to commodities. Sometimes it turns first, sometimes it lags, sometimes the two economies simply drift apart for a bit.
Canada’s recent move lower is interesting. But it’s not a guarantee the U.S. follows right behind it. At best, it’s a nudge, not a signal.
What History Tells You About Rate Cuts and Unemployment
The these charts below I pulled up show something we forget in the moment that when the Fed starts a true easing cycle, unemployment usually doesn’t fall right away. It rises. Not because the cuts make things worse, but because the Fed only cuts aggressively when the turn in the labor market is already underway.
You can see it in the early 2000s. Rates came down fast, but unemployment kept rising before it finally rolled over. Same story in the GFC. Policy went to zero in a hurry, but job losses kept piling up before the bottom formed. The labor market responds with a lag, and cutting rates doesn’t skip that part of the process.
My Read on What’s Happening Now
Canada improving might end up being a temporary blip. The better gauge for where the U.S. goes next is what’s happening underneath the headline numbers like hours worked, continuing claims, and the steady rise in layoffs that don’t always hit the front page. If those stay soft, the historical pattern tends to hold that when easing begins, unemployment often moves up before it moves down.
It’s not the most exciting conclusion, but it’s the honest one. The chart shows the relationship. History shows the rhythm. And the present looks like a moment where we should respect both.
How cool is this? The US unemployment rate could go DOWN. Look at Canada, where they have reported notable declines in unemployment in both October and November. Logically, Canada and the US move together. It points to the US unemployment rate falling. We love macro around here. https://t.co/vBIKRavMKO tweet
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App Economy Insights
US TV Time Market Share:
⚫️ YouTube: 13%
🔴 Netflix: 8%
🔵 Warner Bros.: 1%
Overall streaming: ~46% in October.
Source: Nielsen (excl. YouTube TV). https://t.co/4AK1YNalpv
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US TV Time Market Share:
⚫️ YouTube: 13%
🔴 Netflix: 8%
🔵 Warner Bros.: 1%
Overall streaming: ~46% in October.
Source: Nielsen (excl. YouTube TV). https://t.co/4AK1YNalpv
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EndGame Macro
China Didn’t Leave the Supply Chain It Just Found a New Door
China is still a huge exporter to the U.S., but the growth in exports is increasingly showing up through Vietnam. The blue line doesn’t just rise…it jumps. And it does it at the exact time China’s line starts to flatten out and get more erratic.
That’s not a coincidence. It’s what happens when U.S. tariffs, rules of origin checks, and enforcement make it harder or more expensive for Chinese goods to come in directly. The demand doesn’t disappear; the route changes. Some of that is real supply chain diversification. Some of it is light processing and relabeling to clear customs. From the chart alone, you can’t tell which is which but the shift is obvious.
Why It’s Happening Now
The policy backdrop matters. The U.S. is layering on steeper penalties, stricter origin rules, and targeted tariffs for countries that become China conduits. Vietnam is in that sweet spot because it’s close to China, plugged into its supply chains, and small enough that a big shift from Chinese producers suddenly shows up in the data.
And as U.S. agencies tighten enforcement especially the new 40% penalty for goods flagged as transshipped Vietnam will find itself under more scrutiny. That’s the next phase of this story, not the jump in exports, but the test of how much of that jump reflects real production versus routing.
My Read on What’s Going On
This chart isn’t about China losing the U.S. consumer or Vietnam becoming the new manufacturing superpower overnight. It’s about adaptation and companies finding new paths around political friction. And now, with Washington stepping up enforcement and raising the cost of shortcuts, the system is going to have to adapt again.
If that pressure holds, I think we see three things…
• Vietnam’s export growth cools a bit as compliance tightens.
• More production gets pushed into genuinely local build-outs to meet origin rules.
• Some flows shift again, toward Mexico, India, or anywhere that can still clear customs cleanly.
The chart captures the first move in a longer game. The next moves, as always, will follow the incentives.
tweet
China Didn’t Leave the Supply Chain It Just Found a New Door
China is still a huge exporter to the U.S., but the growth in exports is increasingly showing up through Vietnam. The blue line doesn’t just rise…it jumps. And it does it at the exact time China’s line starts to flatten out and get more erratic.
That’s not a coincidence. It’s what happens when U.S. tariffs, rules of origin checks, and enforcement make it harder or more expensive for Chinese goods to come in directly. The demand doesn’t disappear; the route changes. Some of that is real supply chain diversification. Some of it is light processing and relabeling to clear customs. From the chart alone, you can’t tell which is which but the shift is obvious.
Why It’s Happening Now
The policy backdrop matters. The U.S. is layering on steeper penalties, stricter origin rules, and targeted tariffs for countries that become China conduits. Vietnam is in that sweet spot because it’s close to China, plugged into its supply chains, and small enough that a big shift from Chinese producers suddenly shows up in the data.
And as U.S. agencies tighten enforcement especially the new 40% penalty for goods flagged as transshipped Vietnam will find itself under more scrutiny. That’s the next phase of this story, not the jump in exports, but the test of how much of that jump reflects real production versus routing.
My Read on What’s Going On
This chart isn’t about China losing the U.S. consumer or Vietnam becoming the new manufacturing superpower overnight. It’s about adaptation and companies finding new paths around political friction. And now, with Washington stepping up enforcement and raising the cost of shortcuts, the system is going to have to adapt again.
If that pressure holds, I think we see three things…
• Vietnam’s export growth cools a bit as compliance tightens.
• More production gets pushed into genuinely local build-outs to meet origin rules.
• Some flows shift again, toward Mexico, India, or anywhere that can still clear customs cleanly.
The chart captures the first move in a longer game. The next moves, as always, will follow the incentives.
"Things Are About To Snap": China's Trade Surplus Tops $1 Trillion For The First Time, Sparking Global Howls Of Outrage https://t.co/jYDNqRzSoo tweet
X (formerly Twitter)
zerohedge (@zerohedge) on X
"Things Are About To Snap": China's Trade Surplus Tops $1 Trillion For The First Time, Sparking Global Howls Of Outrage https://t.co/jYDNqRzSoo
EndGame Macro
RT @DiMartinoBooth: Massachusetts employers cut 11,100 jobs in September, the biggest monthly loss since the start of the pandemic in early 2020, according to federal data released Monday by the state Executive Office of Labor and Workforce Development.
@BostonGlobe
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RT @DiMartinoBooth: Massachusetts employers cut 11,100 jobs in September, the biggest monthly loss since the start of the pandemic in early 2020, according to federal data released Monday by the state Executive Office of Labor and Workforce Development.
@BostonGlobe
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Offshore
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EndGame Macro
This Is How Labor Cycles Turn…Quietly at First
This chart is basically a sanity check on the labor market. It blends a lot of different signals like claims, JOLTS layoffs, WARN notices, Challenger cuts, even how often companies mention layoffs on earnings calls and shows whether things are running hotter or cooler than normal.
For most of the past couple of years, everything sat well below zero. That was the labor hoarding phase with companies hanging onto workers because hiring had been too hard. Now that thick blue line is climbing back toward neutral, and it’s doing it quickly. That shift matters. It’s the kind of move you see when the ground under the labor market starts to soften, even if the headline unemployment rate hasn’t caught up yet.
Why This Turn Feels Different
What jumps out is the broadness of the pickup. Layoff mentions on earnings calls are rising. WARN notices are rising. Job cut announcements are rising. Claims haven’t fully budged yet, but they tend to move last. The early indicators are all leaning the same way.
And when you step back and look at the rest of what’s happening with higher delinquencies in credit cards and autos, CRE stress building, bankruptcies at a 15 year high, and more than a million job cuts already announced this year it starts to look less like random noise and more like a pattern. Higher rates work with a lag, and we’re in the part of the cycle where the lag finally starts to show up in labor.
My Read on What’s Coming
This looks like the beginning of a turn…slow, uneven, but pointed in one direction. Companies stop hoarding, they start trimming, and eventually that shows up in the unemployment rate.
If this line crosses above zero and stays there, it’s usually the moment when the conversation shifts from resilient labor market to labor market is cooling. We’re not there yet…but the path upward is the part you pay attention to. It’s often the first signal that the rest of the macro data is about to follow.
tweet
This Is How Labor Cycles Turn…Quietly at First
This chart is basically a sanity check on the labor market. It blends a lot of different signals like claims, JOLTS layoffs, WARN notices, Challenger cuts, even how often companies mention layoffs on earnings calls and shows whether things are running hotter or cooler than normal.
For most of the past couple of years, everything sat well below zero. That was the labor hoarding phase with companies hanging onto workers because hiring had been too hard. Now that thick blue line is climbing back toward neutral, and it’s doing it quickly. That shift matters. It’s the kind of move you see when the ground under the labor market starts to soften, even if the headline unemployment rate hasn’t caught up yet.
Why This Turn Feels Different
What jumps out is the broadness of the pickup. Layoff mentions on earnings calls are rising. WARN notices are rising. Job cut announcements are rising. Claims haven’t fully budged yet, but they tend to move last. The early indicators are all leaning the same way.
And when you step back and look at the rest of what’s happening with higher delinquencies in credit cards and autos, CRE stress building, bankruptcies at a 15 year high, and more than a million job cuts already announced this year it starts to look less like random noise and more like a pattern. Higher rates work with a lag, and we’re in the part of the cycle where the lag finally starts to show up in labor.
My Read on What’s Coming
This looks like the beginning of a turn…slow, uneven, but pointed in one direction. Companies stop hoarding, they start trimming, and eventually that shows up in the unemployment rate.
If this line crosses above zero and stays there, it’s usually the moment when the conversation shifts from resilient labor market to labor market is cooling. We’re not there yet…but the path upward is the part you pay attention to. It’s often the first signal that the rest of the macro data is about to follow.
GS: Recent Alternative Data Also Point to a New Risk of Rising Layoffs https://t.co/aKKd3n3rju tweet
AkhenOsiris
$AMZN
Amazon’s self-driving robotaxi subsidiary, Zoox, expects to start charging passengers for rides in Las Vegas in early 2026, with paid rides in the San Francisco Bay Area coming later next year, a company executive said Monday.
The move, which would represent a key milestone for Zoox as it seeks to catch up with Alphabet’s Waymo, depends on obtaining federal regulatory and state approvals, Zoox Co-founder and chief technology officer Jesse Levinson told the audience at Fortune’s Brainstorm AI event in San Francisco on Monday.
And while robotaxi rival Waymo recently partnered with DoorDash to test food deliveries with driverless cars, Levinson said that Zoox is “laser focused” on moving people around cities, an addressable market he sees as being “just profoundly huge.” That directive has come “all the way from the very top” at Amazon, he added, despite the retailer’s significant interest in driverless package delivery.
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$AMZN
Amazon’s self-driving robotaxi subsidiary, Zoox, expects to start charging passengers for rides in Las Vegas in early 2026, with paid rides in the San Francisco Bay Area coming later next year, a company executive said Monday.
The move, which would represent a key milestone for Zoox as it seeks to catch up with Alphabet’s Waymo, depends on obtaining federal regulatory and state approvals, Zoox Co-founder and chief technology officer Jesse Levinson told the audience at Fortune’s Brainstorm AI event in San Francisco on Monday.
And while robotaxi rival Waymo recently partnered with DoorDash to test food deliveries with driverless cars, Levinson said that Zoox is “laser focused” on moving people around cities, an addressable market he sees as being “just profoundly huge.” That directive has come “all the way from the very top” at Amazon, he added, despite the retailer’s significant interest in driverless package delivery.
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Offshore
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EndGame Macro
Why Europe Will Never Dump Treasuries And What Would Happen If They Tried
These headlines always land like a shock, but when you look at how Europe’s financial system works, the idea falls apart almost immediately. Treasuries aren’t just an investment for Europe, they’re the backbone of how European banks survive stress. They’re dollar collateral, dollar liquidity, and the easiest way to tap dollar markets when things get shaky. That’s not something you toss overboard to make a political point.
And the recent reporting makes that even clearer. The ECB isn’t gearing up to punish the U.S., it’s quietly bracing for the possibility that the Fed’s dollar swap lines could get tangled up in politics. That fear changes the whole conversation. When the thing you rely on most might get pulled back, you don’t start selling the only asset that gives you access to it. You do the opposite…you build buffers, run stress tests, and look for backup plans.
What Would Happen If They Tried
If Europe ever dumped Treasuries in size, they’d feel the blow long before the U.S. would. Funding stress tends to hit European banks first, and losing Treasuries would make that pressure even worse. The euro would whip around, credit conditions would tighten, and the very dollar shortage they worry about would show up instantly. And at the end of the day, the Fed would still step in to stabilize the Treasury market, leaving Europe with the damage and the U.S. with the backstop.
So the “nuclear option” makes for a loud headline, but it’s not a real strategy. Europe’s entire system is built on access to dollars, and Treasuries are the key to that access. Selling them would only weaken Europe’s position and highlight the one thing they already know…for now, the global dollar plumbing still runs through the United States.
If anything, the recent reporting shows the opposite of the headline. Europe isn’t preparing to walk away from Treasuries, it’s preparing for a world where it might need them more than ever.
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Why Europe Will Never Dump Treasuries And What Would Happen If They Tried
These headlines always land like a shock, but when you look at how Europe’s financial system works, the idea falls apart almost immediately. Treasuries aren’t just an investment for Europe, they’re the backbone of how European banks survive stress. They’re dollar collateral, dollar liquidity, and the easiest way to tap dollar markets when things get shaky. That’s not something you toss overboard to make a political point.
And the recent reporting makes that even clearer. The ECB isn’t gearing up to punish the U.S., it’s quietly bracing for the possibility that the Fed’s dollar swap lines could get tangled up in politics. That fear changes the whole conversation. When the thing you rely on most might get pulled back, you don’t start selling the only asset that gives you access to it. You do the opposite…you build buffers, run stress tests, and look for backup plans.
What Would Happen If They Tried
If Europe ever dumped Treasuries in size, they’d feel the blow long before the U.S. would. Funding stress tends to hit European banks first, and losing Treasuries would make that pressure even worse. The euro would whip around, credit conditions would tighten, and the very dollar shortage they worry about would show up instantly. And at the end of the day, the Fed would still step in to stabilize the Treasury market, leaving Europe with the damage and the U.S. with the backstop.
So the “nuclear option” makes for a loud headline, but it’s not a real strategy. Europe’s entire system is built on access to dollars, and Treasuries are the key to that access. Selling them would only weaken Europe’s position and highlight the one thing they already know…for now, the global dollar plumbing still runs through the United States.
If anything, the recent reporting shows the opposite of the headline. Europe isn’t preparing to walk away from Treasuries, it’s preparing for a world where it might need them more than ever.
EUROPEAN OFFICIALS EYE ‘NUCLEAR OPTION’ OF DUMPING U.S. TREASURIES IF TRUMP CUTS UKRAINE DEAL WITHOUT ALLIES — WSJ tweet
AkhenOsiris
OpenAI $GOOGL $MSFT $NVDA $AMZN
Behind Altman’s “code red” declaration, however, are tensions between camps inside the company that have been festering for years, according to people familiar with the matter.
A group including Fidji Simo, a former Meta Platforms executive who leads OpenAI’s product efforts, and Chief Financial Officer Sarah Friar, have pushed the company to pour more resources into ChatGPT. Simo has also told staff that OpenAI needs to do a better job of making sure its users discover the value of ChatGPT’s existing features before the company goes on to build new ones, and also wants to improve the chatbot’s speed and reliability.
Researchers meanwhile have prioritized state of the art technology that could lead to artificial general intelligence, or AGI, but don’t do as much to improve the basic chatbot experience.
OpenAI is set to release a new model, called 5.2, this week that executives hope will give it new momentum, particularly among coding and business customers. They overruled some employees who asked to push back the model’s release so the company could have more time to make it better, according to people familiar with the matter.
The company also plans to release another model in January with better images, improved speed and a better personality, and to end the code red after that, Altman said.
An OpenAI spokeswoman says there’s no conflict between the two philosophies, and that broad adoption of AI tools is how the company plans to distribute AGI’s benefit.
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OpenAI $GOOGL $MSFT $NVDA $AMZN
Behind Altman’s “code red” declaration, however, are tensions between camps inside the company that have been festering for years, according to people familiar with the matter.
A group including Fidji Simo, a former Meta Platforms executive who leads OpenAI’s product efforts, and Chief Financial Officer Sarah Friar, have pushed the company to pour more resources into ChatGPT. Simo has also told staff that OpenAI needs to do a better job of making sure its users discover the value of ChatGPT’s existing features before the company goes on to build new ones, and also wants to improve the chatbot’s speed and reliability.
Researchers meanwhile have prioritized state of the art technology that could lead to artificial general intelligence, or AGI, but don’t do as much to improve the basic chatbot experience.
OpenAI is set to release a new model, called 5.2, this week that executives hope will give it new momentum, particularly among coding and business customers. They overruled some employees who asked to push back the model’s release so the company could have more time to make it better, according to people familiar with the matter.
The company also plans to release another model in January with better images, improved speed and a better personality, and to end the code red after that, Altman said.
An OpenAI spokeswoman says there’s no conflict between the two philosophies, and that broad adoption of AI tools is how the company plans to distribute AGI’s benefit.
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