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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: $MA increased its quarterly dividend by +14% to $0.87 per share & authorized a new $14B buyback program 💳
The new repurchase plan will go into effect after the remaining $4.2B under the existing authorization is completed https://t.co/onRThbjubF
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RT @DimitryNakhla: $MA increased its quarterly dividend by +14% to $0.87 per share & authorized a new $14B buyback program 💳
The new repurchase plan will go into effect after the remaining $4.2B under the existing authorization is completed https://t.co/onRThbjubF
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Quiver Quantitative
JUST IN: Representative Stephen Lynch has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/EQbisKaige
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JUST IN: Representative Stephen Lynch has signed Rep. Luna's discharge petition to force a vote on a congressional stock trading ban. https://t.co/EQbisKaige
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EndGame Macro
We’ve Burned the Cushion Right Before the Biggest Refi Year in Modern History
This line is basically a stress barometer for the financial system. It measures how much easy, ready to use cash sits inside banks (reserves and reverse repo) relative to total deposits. When it’s high, everything feels effortless. Repo trades clean, Treasury auctions go smoothly, and calendar swings don’t matter.
When it’s low, the system still works but it gets touchier. Small timing mismatches start to matter. Settlement days matter. Suddenly the pipes have less room to absorb shocks.
We’ve been here before. Every time this gauge dips under that 16% area, something in the plumbing eventually creaks. In 2019, it wasn’t the economy that snapped, it was the funding market. A routine cluster of tax payments and settlements hit thin reserves, repo rates exploded overnight, and the Fed had to step in immediately. The lesson is simple…you don’t see plumbing problems until they’re already happening.
What Makes This Drop Different From the Others
In the earlier troughs, the story was straightforward where reserves got low, and there wasn’t much of a backup buffer. The system was fragile, but fragile in a clean, recognizable way.
This time is different because the past 2 years came with a massive safety valve with the Fed’s reverse repo facility. At its peak, money funds had more than $2 trillion parked there. That pile of cash acted like a shock absorber. QT could run, Treasury could issue aggressively, and the system barely felt it because RRP quietly soaked up the pressure.
But now that cushion has basically vanished. RRP is back near zero, and reserves are drifting into the same zone that preceded the 2019 funding spike. So we’re hitting the low liquidity area after burning through the giant buffer that kept everything calm the past two years.
That’s the part worth underlining:
every previous trough came with low reserves but no prior cushion. This trough comes with low reserves and an exhausted cushion. It’s a thinner margin than the chart makes obvious at first glance.
That’s why the Fed is already nudging bill purchases back into the conversation. They’re trying to make sure the pipes don’t rattle at the worst possible moment.
What Happens If This Line Keeps Slipping
If this gauge inches lower, the first cracks won’t show up in stocks. They’ll show up in the money markets…sloppy bill auctions, noisy repo prints, odd funding spreads. That’s how it always starts.
And here’s the bigger point..we’ve NEVER gone into a massive refinancing year at this scale with $9T of U.S. government debt, $1.8T in CRE, $16T globally with liquidity this thin and no buffer left in RRP. There’s no real historical precedent for that combination. Past cycles either had less rollover pressure, or QE was already underway before the maturity wall arrived.
The system is entering a phase where the Fed will have to be quicker and more proactive than they were in 2019, because the cushion that softened the tightening cycle is gone. The risk isn’t that something breaks out of nowhere, it’s that the usual calendar drains now land directly on core reserves.
The Fed knows this. The market should too.
Credit to @nickgerli1 for the chart.
tweet
We’ve Burned the Cushion Right Before the Biggest Refi Year in Modern History
This line is basically a stress barometer for the financial system. It measures how much easy, ready to use cash sits inside banks (reserves and reverse repo) relative to total deposits. When it’s high, everything feels effortless. Repo trades clean, Treasury auctions go smoothly, and calendar swings don’t matter.
When it’s low, the system still works but it gets touchier. Small timing mismatches start to matter. Settlement days matter. Suddenly the pipes have less room to absorb shocks.
We’ve been here before. Every time this gauge dips under that 16% area, something in the plumbing eventually creaks. In 2019, it wasn’t the economy that snapped, it was the funding market. A routine cluster of tax payments and settlements hit thin reserves, repo rates exploded overnight, and the Fed had to step in immediately. The lesson is simple…you don’t see plumbing problems until they’re already happening.
What Makes This Drop Different From the Others
In the earlier troughs, the story was straightforward where reserves got low, and there wasn’t much of a backup buffer. The system was fragile, but fragile in a clean, recognizable way.
This time is different because the past 2 years came with a massive safety valve with the Fed’s reverse repo facility. At its peak, money funds had more than $2 trillion parked there. That pile of cash acted like a shock absorber. QT could run, Treasury could issue aggressively, and the system barely felt it because RRP quietly soaked up the pressure.
But now that cushion has basically vanished. RRP is back near zero, and reserves are drifting into the same zone that preceded the 2019 funding spike. So we’re hitting the low liquidity area after burning through the giant buffer that kept everything calm the past two years.
That’s the part worth underlining:
every previous trough came with low reserves but no prior cushion. This trough comes with low reserves and an exhausted cushion. It’s a thinner margin than the chart makes obvious at first glance.
That’s why the Fed is already nudging bill purchases back into the conversation. They’re trying to make sure the pipes don’t rattle at the worst possible moment.
What Happens If This Line Keeps Slipping
If this gauge inches lower, the first cracks won’t show up in stocks. They’ll show up in the money markets…sloppy bill auctions, noisy repo prints, odd funding spreads. That’s how it always starts.
And here’s the bigger point..we’ve NEVER gone into a massive refinancing year at this scale with $9T of U.S. government debt, $1.8T in CRE, $16T globally with liquidity this thin and no buffer left in RRP. There’s no real historical precedent for that combination. Past cycles either had less rollover pressure, or QE was already underway before the maturity wall arrived.
The system is entering a phase where the Fed will have to be quicker and more proactive than they were in 2019, because the cushion that softened the tightening cycle is gone. The risk isn’t that something breaks out of nowhere, it’s that the usual calendar drains now land directly on core reserves.
The Fed knows this. The market should too.
Credit to @nickgerli1 for the chart.
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EndGame Macro
Millions of Empty Homes And Still a Shortage? America Is Becoming Japan
These states don’t have a shortage, they have homes sitting empty. Maine, Vermont, Alaska, West Virginia, Mississippi, Arkansas… these are places with either seasonal homes, aging populations, slow job growth, or long running out migration.
Nationally, the number sits around 15 million vacant homes, about 10% of the housing stock. That’s not the picture of a country that simply ran out of houses. It’s the picture of a country where the homes aren’t always where people want to live or work.
And when you zoom in on who owns the housing, the story deepens. Boomers and older generations hold over 40% of all U.S. real estate. As they age out, somewhere around 8–9 million homes are expected to hit the market by the mid 2030s. Some years could see more than a million units freed up just from generational turnover.
This isn’t a shortage. It’s a geographic mismatch.
The Japan Parallel Is Hard to Ignore
Japan lived this story before us.
For decades, Tokyo and a few big cities felt chronically under housed with prices high, supply tight, demand endless. Meanwhile, rural Japan quietly emptied out. Entire regions lost young people to the cities, and over time those vacant homes turned into akiya “ghost houses.” Millions of them.
What’s striking is that Japan kept using the “housing shortage” language long after the national population began to shrink. The real shortage was local and inside the major economic hubs while everywhere else was slipping into long term decline.
Sound familiar?
It should. Because the U.S. is setting up with the exact same pattern with tight urban supply, aging rural stock, big demographic turnover, and a slow population flattening that kicks in around 2025–2030.
Why the Housing Shortage Narrative Won’t Go Away
So why does the messaging keep insisting we’re short on homes when the data says we’re sitting on millions of empties?
Because the narrative isn’t about total units. It’s about keeping the system moving through an uncomfortable demographic shift.
Here’s the quiet logic behind it…
1.Protect asset prices as Boomers start releasing supply.
2.Justify funneling capital into major economic hubs, not declining regions.
https://t.co/Te9ldXTY00 time while the population slowly ages and migrates toward the cities.
4.Avoid admitting the real issue, demand isn’t vanishing, it’s concentrating.
This is exactly how Japan handled its transition. The country didn’t talk about population decline until it was impossible to ignore. Before that, the story was always framed through housing pressure in Tokyo even as rural areas hollowed out.
My View
The U.S. isn’t heading for a national housing shortage. It’s heading for housing polarization with tight supply and high prices in a handful of economic magnets, and growing vacancy in places that struggle to attract young workers or new industries.
As demographics shift and Boomers release millions of units, those homes will not magically solve affordability in New York, Austin, Denver, or Seattle. They’ll mostly end up in regions already losing population.
Policy will follow the people. Investment dollars will follow the jobs. Rural decline accelerates, metro hubs thicken, and the empty home map expands even as the housing shortage narrative stays front and center.
Not because it’s true in a literal sense but because it’s the cleanest way to manage a slow demographic turn without spooking the country.
The U.S. is starting the same demographic chapter Japan opened a generation ago. Anyone reading the signs can see where it leads.
tweet
Millions of Empty Homes And Still a Shortage? America Is Becoming Japan
These states don’t have a shortage, they have homes sitting empty. Maine, Vermont, Alaska, West Virginia, Mississippi, Arkansas… these are places with either seasonal homes, aging populations, slow job growth, or long running out migration.
Nationally, the number sits around 15 million vacant homes, about 10% of the housing stock. That’s not the picture of a country that simply ran out of houses. It’s the picture of a country where the homes aren’t always where people want to live or work.
And when you zoom in on who owns the housing, the story deepens. Boomers and older generations hold over 40% of all U.S. real estate. As they age out, somewhere around 8–9 million homes are expected to hit the market by the mid 2030s. Some years could see more than a million units freed up just from generational turnover.
This isn’t a shortage. It’s a geographic mismatch.
The Japan Parallel Is Hard to Ignore
Japan lived this story before us.
For decades, Tokyo and a few big cities felt chronically under housed with prices high, supply tight, demand endless. Meanwhile, rural Japan quietly emptied out. Entire regions lost young people to the cities, and over time those vacant homes turned into akiya “ghost houses.” Millions of them.
What’s striking is that Japan kept using the “housing shortage” language long after the national population began to shrink. The real shortage was local and inside the major economic hubs while everywhere else was slipping into long term decline.
Sound familiar?
It should. Because the U.S. is setting up with the exact same pattern with tight urban supply, aging rural stock, big demographic turnover, and a slow population flattening that kicks in around 2025–2030.
Why the Housing Shortage Narrative Won’t Go Away
So why does the messaging keep insisting we’re short on homes when the data says we’re sitting on millions of empties?
Because the narrative isn’t about total units. It’s about keeping the system moving through an uncomfortable demographic shift.
Here’s the quiet logic behind it…
1.Protect asset prices as Boomers start releasing supply.
2.Justify funneling capital into major economic hubs, not declining regions.
https://t.co/Te9ldXTY00 time while the population slowly ages and migrates toward the cities.
4.Avoid admitting the real issue, demand isn’t vanishing, it’s concentrating.
This is exactly how Japan handled its transition. The country didn’t talk about population decline until it was impossible to ignore. Before that, the story was always framed through housing pressure in Tokyo even as rural areas hollowed out.
My View
The U.S. isn’t heading for a national housing shortage. It’s heading for housing polarization with tight supply and high prices in a handful of economic magnets, and growing vacancy in places that struggle to attract young workers or new industries.
As demographics shift and Boomers release millions of units, those homes will not magically solve affordability in New York, Austin, Denver, or Seattle. They’ll mostly end up in regions already losing population.
Policy will follow the people. Investment dollars will follow the jobs. Rural decline accelerates, metro hubs thicken, and the empty home map expands even as the housing shortage narrative stays front and center.
Not because it’s true in a literal sense but because it’s the cleanest way to manage a slow demographic turn without spooking the country.
The U.S. is starting the same demographic chapter Japan opened a generation ago. Anyone reading the signs can see where it leads.
tweet
Offshore
Photo
EndGame Macro
Millions of Empty Homes And Still a Shortage? America Is Becoming Japan
These states don’t have a shortage, they have homes sitting empty. Maine, Vermont, Alaska, West Virginia, Mississippi, Arkansas… these are places with either seasonal homes, aging populations, slow job growth, or long running out migration.
Nationally, the number sits around 15 million vacant homes, about 10% of the housing stock. That’s not the picture of a country that simply ran out of houses. It’s the picture of a country where the homes aren’t always where people want to live or work.
And when you zoom in on who owns the housing, the story deepens. Boomers and older generations hold over 40% of all U.S. real estate. As they age out, somewhere around 8–9 million homes are expected to hit the market by the mid 2030s. Some years could see more than a million units freed up just from generational turnover.
This isn’t a shortage. It’s a geographic mismatch.
The Japan Parallel Is Hard to Ignore
Japan lived this story before us.
For decades, Tokyo and a few big cities felt chronically under housed with prices high, supply tight, demand endless. Meanwhile, rural Japan quietly emptied out. Entire regions lost young people to the cities, and over time those vacant homes turned into akiya “ghost houses.” Millions of them.
What’s striking is that Japan kept using the “housing shortage” language long after the national population began to shrink. The real shortage was local and inside the major economic hubs while everywhere else was slipping into long term decline.
Sound familiar?
It should. Because the U.S. is setting up with the exact same pattern with tight urban supply, aging rural stock, big demographic turnover, and a slow population flattening that kicks in around 2025–2030.
Why the Housing Shortage Narrative Won’t Go Away
So why does the messaging keep insisting we’re short on homes when the data says we’re sitting on millions of empties?
Because the narrative isn’t about total units. It’s about keeping the system moving through an uncomfortable demographic shift.
Here’s the quiet logic behind it…
1. Protect asset prices as Boomers start releasing supply.
2. Justify funneling capital into major economic hubs, not declining regions.
3. Buy time while the population slowly ages and migrates toward the cities.
4. Avoid admitting the real issue, demand isn’t vanishing, it’s concentrating.
This is exactly how Japan handled its transition. The country didn’t talk about population decline until it was impossible to ignore. Before that, the story was always framed through housing pressure in Tokyo even as rural areas hollowed out.
My View
The U.S. isn’t heading for a national housing shortage. It’s heading for housing polarization with tight supply and high prices in a handful of economic magnets, and growing vacancy in places that struggle to attract young workers or new industries.
As demographics shift and Boomers release millions of units, those homes will not magically solve affordability in New York, Austin, Denver, or Seattle. They’ll mostly end up in regions already losing population.
Policy will follow the people. Investment dollars will follow the jobs. Rural decline accelerates, metro hubs thicken, and the empty home map expands even as the housing shortage narrative stays front and center.
Not because it’s true in a literal sense but because it’s the cleanest way to manage a slow demographic turn without spooking the country.
The U.S. is starting the same demographic chapter Japan opened a generation ago. Anyone reading the signs can see where it leads.
tweet
Millions of Empty Homes And Still a Shortage? America Is Becoming Japan
These states don’t have a shortage, they have homes sitting empty. Maine, Vermont, Alaska, West Virginia, Mississippi, Arkansas… these are places with either seasonal homes, aging populations, slow job growth, or long running out migration.
Nationally, the number sits around 15 million vacant homes, about 10% of the housing stock. That’s not the picture of a country that simply ran out of houses. It’s the picture of a country where the homes aren’t always where people want to live or work.
And when you zoom in on who owns the housing, the story deepens. Boomers and older generations hold over 40% of all U.S. real estate. As they age out, somewhere around 8–9 million homes are expected to hit the market by the mid 2030s. Some years could see more than a million units freed up just from generational turnover.
This isn’t a shortage. It’s a geographic mismatch.
The Japan Parallel Is Hard to Ignore
Japan lived this story before us.
For decades, Tokyo and a few big cities felt chronically under housed with prices high, supply tight, demand endless. Meanwhile, rural Japan quietly emptied out. Entire regions lost young people to the cities, and over time those vacant homes turned into akiya “ghost houses.” Millions of them.
What’s striking is that Japan kept using the “housing shortage” language long after the national population began to shrink. The real shortage was local and inside the major economic hubs while everywhere else was slipping into long term decline.
Sound familiar?
It should. Because the U.S. is setting up with the exact same pattern with tight urban supply, aging rural stock, big demographic turnover, and a slow population flattening that kicks in around 2025–2030.
Why the Housing Shortage Narrative Won’t Go Away
So why does the messaging keep insisting we’re short on homes when the data says we’re sitting on millions of empties?
Because the narrative isn’t about total units. It’s about keeping the system moving through an uncomfortable demographic shift.
Here’s the quiet logic behind it…
1. Protect asset prices as Boomers start releasing supply.
2. Justify funneling capital into major economic hubs, not declining regions.
3. Buy time while the population slowly ages and migrates toward the cities.
4. Avoid admitting the real issue, demand isn’t vanishing, it’s concentrating.
This is exactly how Japan handled its transition. The country didn’t talk about population decline until it was impossible to ignore. Before that, the story was always framed through housing pressure in Tokyo even as rural areas hollowed out.
My View
The U.S. isn’t heading for a national housing shortage. It’s heading for housing polarization with tight supply and high prices in a handful of economic magnets, and growing vacancy in places that struggle to attract young workers or new industries.
As demographics shift and Boomers release millions of units, those homes will not magically solve affordability in New York, Austin, Denver, or Seattle. They’ll mostly end up in regions already losing population.
Policy will follow the people. Investment dollars will follow the jobs. Rural decline accelerates, metro hubs thicken, and the empty home map expands even as the housing shortage narrative stays front and center.
Not because it’s true in a literal sense but because it’s the cleanest way to manage a slow demographic turn without spooking the country.
The U.S. is starting the same demographic chapter Japan opened a generation ago. Anyone reading the signs can see where it leads.
tweet
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memenodes
never lose faith crypto guys, maybe the women of your life is still in production https://t.co/UcuaZhyTnP
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never lose faith crypto guys, maybe the women of your life is still in production https://t.co/UcuaZhyTnP
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memenodes
crypto bros would have $3 MILLION in crypto and choose to live like this https://t.co/PlCN1WY2K6
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crypto bros would have $3 MILLION in crypto and choose to live like this https://t.co/PlCN1WY2K6
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crypto guys will live like this to save an extra $500 every month for the dip https://t.co/WNAMS6ROjY
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crypto guys will live like this to save an extra $500 every month for the dip https://t.co/WNAMS6ROjY
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realizing I go to work everyday at 6 AM because I was too shy to dance on tiktok in 2020 https://t.co/5wCw9o5REj
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realizing I go to work everyday at 6 AM because I was too shy to dance on tiktok in 2020 https://t.co/5wCw9o5REj
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