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App Economy Insights
RT @EconomyApp: Wealthfront is going public this week.
Ticker: $WLTH
Valuation: ~$2B
Funded Clients: 1.3M
Platform Assets: $88B
📊 How They Make Money: ~75% of revenue comes from cash management (not advisory fees). This makes the model highly sensitive to interest rates.
Would you buy this over $HOOD or $SOFI?
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RT @EconomyApp: Wealthfront is going public this week.
Ticker: $WLTH
Valuation: ~$2B
Funded Clients: 1.3M
Platform Assets: $88B
📊 How They Make Money: ~75% of revenue comes from cash management (not advisory fees). This makes the model highly sensitive to interest rates.
Would you buy this over $HOOD or $SOFI?
tweet
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EndGame Macro
The 10 Year Isn’t Buying the Fed’s Easing Story
The Fed is easing at the front end, and you can see that in short term rates. But the 10 year isn’t playing along. It’s staying high and even pulling away from Fed Funds which is why this spread is as wide as it’s been in years. That’s the bond market quietly reminding everyone who sets the price of long term money.
The Fed can cut, but it can’t force investors to lend long on the cheap.
Why the 10 Year Is Pushing Back
Part of this is straightforward. The economy is cooling. Layoffs are creeping up, hiring is less confident, and housing is rolling over first in the places that always turn early. That’s enough for the Fed to start cutting.
But the 10 year is focused on a different problem. There’s a lot of debt that needs to be refinanced over the next couple of years. Treasury supply is heavy, deficits aren’t going away, and the global backdrop is noisier with more tariffs, more geopolitics, more uncertainty. Even if inflation ends up cooling, the fear of inflation sticks around longer than the reality.
So investors are basically saying “Cut if you want but if I’m lending for ten years in this environment, I still want to be paid.” That’s term premium coming back.
What This Means And Where The Fed Gets Boxed In
This kind of widening doesn’t mean the economy is about to fall apart tomorrow. But it does mean relief doesn’t travel very far. Credit cards might get a little cheaper, but mortgages and long term financing don’t magically follow if the 10 year stays elevated.
Historically, this shows up late in the cycle. Growth is slowing, stress is building, and policy is reacting rather than leading. Cuts work, just unevenly.
If unemployment keeps rising and the economy keeps softening, the 10 year will eventually come down on its own as growth fears take over. If it doesn’t, the Fed faces a tougher choice that they either accept tighter financial conditions, or step in more directly to compress long term rates. That’s where talk of QE starts to matter and not because inflation is low, but because the transmission from policy to the real economy is breaking down.
The risk isn’t that rate cuts fail. It’s that they don’t reach the places that matter until the slowdown has already done some damage.
tweet
The 10 Year Isn’t Buying the Fed’s Easing Story
The Fed is easing at the front end, and you can see that in short term rates. But the 10 year isn’t playing along. It’s staying high and even pulling away from Fed Funds which is why this spread is as wide as it’s been in years. That’s the bond market quietly reminding everyone who sets the price of long term money.
The Fed can cut, but it can’t force investors to lend long on the cheap.
Why the 10 Year Is Pushing Back
Part of this is straightforward. The economy is cooling. Layoffs are creeping up, hiring is less confident, and housing is rolling over first in the places that always turn early. That’s enough for the Fed to start cutting.
But the 10 year is focused on a different problem. There’s a lot of debt that needs to be refinanced over the next couple of years. Treasury supply is heavy, deficits aren’t going away, and the global backdrop is noisier with more tariffs, more geopolitics, more uncertainty. Even if inflation ends up cooling, the fear of inflation sticks around longer than the reality.
So investors are basically saying “Cut if you want but if I’m lending for ten years in this environment, I still want to be paid.” That’s term premium coming back.
What This Means And Where The Fed Gets Boxed In
This kind of widening doesn’t mean the economy is about to fall apart tomorrow. But it does mean relief doesn’t travel very far. Credit cards might get a little cheaper, but mortgages and long term financing don’t magically follow if the 10 year stays elevated.
Historically, this shows up late in the cycle. Growth is slowing, stress is building, and policy is reacting rather than leading. Cuts work, just unevenly.
If unemployment keeps rising and the economy keeps softening, the 10 year will eventually come down on its own as growth fears take over. If it doesn’t, the Fed faces a tougher choice that they either accept tighter financial conditions, or step in more directly to compress long term rates. That’s where talk of QE starts to matter and not because inflation is low, but because the transmission from policy to the real economy is breaking down.
The risk isn’t that rate cuts fail. It’s that they don’t reach the places that matter until the slowdown has already done some damage.
10yr yield hits the highest spread over Fed Funds in 3yrs
The number of people on Fox Business, CNBC, CNN, etc that claim FFR cuts will benefit average Americans thru lower CC rates, mortgage rates, etc is astounding
The 10yr is where those are priced & the spread is WIDENING https://t.co/Bb24XqzUzw tweet
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EndGame Macro
Watch this….
Now roll the tape forward into 2026 and assume unemployment keeps inching higher. That alone starts to matter. The quality of borrowers banks want to lend to keeps slipping, credit standards tighten, and lending gets more selective even if rates are coming down.
Now think about what that does to people’s heads. Even folks making good money start feeling uneasy about job security. If John sees a couple of coworkers get laid off, is he really going to sign up for a 30 year mortgage knowing he could be next? Probably not. Then look at retirees. If home prices are sliding and they’re sitting on a lot of equity, and the stock market corrects at the same time, the instinct shifts to protecting capital like downsizing, selling, getting liquid. And let’s be honest when the 10 year yield and mortgage rates are falling, that’s not a sign housing is fixed. It’s the bond market telling you growth is slowing and risk is rising. That’s how you can end up with home prices falling even as rates drop. It’s not about affordability. It’s about psychology. @patrickbetdavid @m3_melody @DiMartinoBooth
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Watch this….
Now roll the tape forward into 2026 and assume unemployment keeps inching higher. That alone starts to matter. The quality of borrowers banks want to lend to keeps slipping, credit standards tighten, and lending gets more selective even if rates are coming down.
Now think about what that does to people’s heads. Even folks making good money start feeling uneasy about job security. If John sees a couple of coworkers get laid off, is he really going to sign up for a 30 year mortgage knowing he could be next? Probably not. Then look at retirees. If home prices are sliding and they’re sitting on a lot of equity, and the stock market corrects at the same time, the instinct shifts to protecting capital like downsizing, selling, getting liquid. And let’s be honest when the 10 year yield and mortgage rates are falling, that’s not a sign housing is fixed. It’s the bond market telling you growth is slowing and risk is rising. That’s how you can end up with home prices falling even as rates drop. It’s not about affordability. It’s about psychology. @patrickbetdavid @m3_melody @DiMartinoBooth
“Pricing About To Go DOWN" - Housing Prices COLLAPSE As Delistings SKYROCKET Nationwide https://t.co/p5Sr0E6qMK tweet
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Quiver Quantitative
Representative Dan Goldman has proposed a bill that would put a 20% tax on loans secured by capital assets for high-income individuals.
It's called the ROBINHOOD Act. https://t.co/pa3yUaCC0F
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Representative Dan Goldman has proposed a bill that would put a 20% tax on loans secured by capital assets for high-income individuals.
It's called the ROBINHOOD Act. https://t.co/pa3yUaCC0F
tweet
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EndGame Macro
Oracle’s Future Is Big But The Bill Is Bigger
Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly running workloads.
The backlog is the headline number for a reason. RPO jumped to $523B, up from under $100B a year ago, driven by a handful of very large cloud contracts. These are signed commitments. The catch is timing, only about 10% converts to revenue in the next 12 months. Most of it lives years out.
Operating profitability is still solid. Core margins aren’t distressed, and the business is not falling apart operationally.
What looks strong but is partly cosmetic
Net income almost doubled, but that’s not because the business suddenly became far more profitable. A large portion came from non operating investment gains, not customers or pricing power.
The tax rate also flatters the quarter. Oracle explicitly tells you that once you strip out one offs, the real tax rate is closer to 21%. In other words…don’t extrapolate this quarter’s GAAP earnings too far.
Cash on hand went up, but mostly because Oracle issued debt and sold an investment, not because free cash flow suddenly surged. This wasn’t a cash harvesting quarter, it was a funding quarter.
Where the pressure is building
The strain isn’t on the revenue line. It’s on the cost of becoming a cloud infrastructure company at speed.
Cloud costs are rising fast. Data center capacity is expensive, and Oracle says directly that these costs will continue climbing as it expands footprint and geography. Segment margins are compressing, and restructuring charges are showing up as the company tries to keep that compression contained.
This is the classic transition risk where revenue can look fine for a while even as cash economics worsen, because spending happens up front and revenue arrives later.
Balance sheet and cash flow reality
Oracle is clearly in build mode.
Property, plant, and equipment jumped sharply in just 6 months. Total assets ballooned. Debt is higher, and recent issuance locked in long dated fixed coupons in the mid 4% to low 6% range, which tells you financing is no longer cheap.
The most important disclosure is off the balance sheet where Oracle has $248B in uncommitted future data center lease obligations, starting in FY26–FY28, with 15–19 year terms. These don’t fully show up yet, but they are real future costs.
Operating cash flow is positive, but free cash flow is deeply negative because capex is running far ahead of cash generation. Some of that spend hasn’t even hit cash yet and is sitting in unpaid capex.
Liquidity looks better, but it’s been engineered to support the buildout, not because the business is throwing off excess cash.
Why the stock is acting this way
The market isn’t confused about growth. It’s uneasy about timing and execution.
Oracle is being repriced like an infrastructure builder, not a pure software name. When long term rates are high and credit is less forgiving, investors get less patient with “we’ll earn it later” stories especially when the company has already committed to massive fixed costs.
That’s why even rumors about delays matter. It’s not about whether Oracle is lying. It’s about the fact that small timing slips matter a lot when spending is front loaded and margins are under pressure.
My Read
Oracle today is a company with real cloud demand and a massive long term opportunity, but also very real near term financial strain from building that future all at once.
Earnings optics look good, but cash flow tells a harder story. The balance sheet can handle it for now but the margin for execution error is thinner than the stock price was implying.
The market isn’t rejecting the growth story. It’s deciding how much it trusts Oracle to deliver it on time, at scale, and without letting cash flow and leverage become the story instead.
Oracle Shares Rebou[...]
Oracle’s Future Is Big But The Bill Is Bigger
Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly running workloads.
The backlog is the headline number for a reason. RPO jumped to $523B, up from under $100B a year ago, driven by a handful of very large cloud contracts. These are signed commitments. The catch is timing, only about 10% converts to revenue in the next 12 months. Most of it lives years out.
Operating profitability is still solid. Core margins aren’t distressed, and the business is not falling apart operationally.
What looks strong but is partly cosmetic
Net income almost doubled, but that’s not because the business suddenly became far more profitable. A large portion came from non operating investment gains, not customers or pricing power.
The tax rate also flatters the quarter. Oracle explicitly tells you that once you strip out one offs, the real tax rate is closer to 21%. In other words…don’t extrapolate this quarter’s GAAP earnings too far.
Cash on hand went up, but mostly because Oracle issued debt and sold an investment, not because free cash flow suddenly surged. This wasn’t a cash harvesting quarter, it was a funding quarter.
Where the pressure is building
The strain isn’t on the revenue line. It’s on the cost of becoming a cloud infrastructure company at speed.
Cloud costs are rising fast. Data center capacity is expensive, and Oracle says directly that these costs will continue climbing as it expands footprint and geography. Segment margins are compressing, and restructuring charges are showing up as the company tries to keep that compression contained.
This is the classic transition risk where revenue can look fine for a while even as cash economics worsen, because spending happens up front and revenue arrives later.
Balance sheet and cash flow reality
Oracle is clearly in build mode.
Property, plant, and equipment jumped sharply in just 6 months. Total assets ballooned. Debt is higher, and recent issuance locked in long dated fixed coupons in the mid 4% to low 6% range, which tells you financing is no longer cheap.
The most important disclosure is off the balance sheet where Oracle has $248B in uncommitted future data center lease obligations, starting in FY26–FY28, with 15–19 year terms. These don’t fully show up yet, but they are real future costs.
Operating cash flow is positive, but free cash flow is deeply negative because capex is running far ahead of cash generation. Some of that spend hasn’t even hit cash yet and is sitting in unpaid capex.
Liquidity looks better, but it’s been engineered to support the buildout, not because the business is throwing off excess cash.
Why the stock is acting this way
The market isn’t confused about growth. It’s uneasy about timing and execution.
Oracle is being repriced like an infrastructure builder, not a pure software name. When long term rates are high and credit is less forgiving, investors get less patient with “we’ll earn it later” stories especially when the company has already committed to massive fixed costs.
That’s why even rumors about delays matter. It’s not about whether Oracle is lying. It’s about the fact that small timing slips matter a lot when spending is front loaded and margins are under pressure.
My Read
Oracle today is a company with real cloud demand and a massive long term opportunity, but also very real near term financial strain from building that future all at once.
Earnings optics look good, but cash flow tells a harder story. The balance sheet can handle it for now but the margin for execution error is thinner than the stock price was implying.
The market isn’t rejecting the growth story. It’s deciding how much it trusts Oracle to deliver it on time, at scale, and without letting cash flow and leverage become the story instead.
Oracle Shares Rebou[...]
Offshore
EndGame Macro Oracle’s Future Is Big But The Bill Is Bigger Cloud revenue is growing fast, up to about $8B this quarter from $6B a year ago, while traditional software is flat to down. Oracle is no longer just selling licenses; it’s increasingly running workloads.…
nd After Denying 'Delays' https://t.co/V9H3ghr5CB - zerohedge tweet
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EndGame Macro
🇯🇵 Japan’s Quiet Move With Loud Global Consequences
Japan raising rates is a global funding headline. For years, the yen has been the cheapest place on earth to borrow. That’s how a huge amount of global risk taking was financed…borrow yen, buy higher yielding assets elsewhere. As long as markets were calm and yield gaps stayed wide, being short yen paid well and felt safe.
That’s why the yen kept weakening. Not because Japan was collapsing, but because the world was rewarding leverage.
When Japan nudges rates higher and hints it may stop protecting its bond market as aggressively, that cheap funding starts to disappear enough to change behavior.
And the timing couldn’t be worse. If the global economy is already slowing…Japan, the U.S., the U.K., all at once then investors aren’t looking to add risk. They’re looking for exits at the same time.
The yen is the transmission channel
The real danger is what happens if the yen stops falling and starts rising in a global downturn.
Carry trades don’t unwind politely. They unwind when FX moves against them. Once the yen strengthens, funding costs jump, losses pile up, and positions get cut. That selling pushes the yen higher, forcing more selling. It’s a feedback loop.
Up to now, the lack of sustained stress let this trade persist. In a synchronized recession, volatility rises everywhere at once. That’s when the yen flips from funding currency to pressure valve.
Japan is also one of the world’s largest exporters of capital. If domestic yields become more attractive and FX risk feels less one sided, Japanese institutions don’t need to reach as far abroad, exactly when everyone else is trying to derisk too.
What this does to U.S. and U.K. bonds
People assume recession means yields fall. Often true…until the plumbing gets stressed.
If Japan normalizes while the U.S. and U.K. slide into recession, you can get weaker growth expectations but less reliable foreign buying of long dated bonds. That’s how term premium creeps back in even as growth fades.
In a more disorderly scenario, it’s worse. When leverage comes off quickly across regions, markets sell what’s liquid, not what’s risky. Treasuries and Gilts are liquid and they’re collateral. In a scramble for cash, even safe bonds can sell off temporarily because they’re used to meet margin calls elsewhere.
That’s how you get recession and stubbornly high long end yields for a time.
The trade and tariff backdrop makes this harder
Japan can’t lean on exports the way it used to. Tariffs, weaker global demand, and China’s competitiveness are already pressuring its export model. That pressure helped weaken the yen during the carry phase but it also leaves Japan more exposed if conditions tighten suddenly.
In a global recession, export weakness feeds directly into profits and confidence. A stronger yen in that environment tightens real conditions fast.
That’s why Japan’s policy path is fragile. Hiking supports the currency, but tightens into a synchronized slowdown. That tension is what turns Japan into a transmission hub.
What to watch for and the real breakpoints
This doesn’t break gradually. It breaks when things move too fast.
A sharp yen rally matters more than levels. JGB volatility matters more than yields. FX hedging stress matters more than central bank words. And if U.S. or U.K. bond volatility feeds on itself during recession, policymakers get dragged back in whether they want to or not.
The big risk people are missing
Japan’s hike is about tightening the world’s funding system at the worst possible moment.
The underappreciated risk is a yen led deleveraging wave during a synchronized recession forcing selling of U.S. Treasuries and U.K. Gilts for collateral reasons, pushing yields higher right when recession logic says they should fall.
That’s how market stress comes first and policy response second.
That’s the setup Japan is quietly reintroducing.
“The Bank of Japan is moving[...]
🇯🇵 Japan’s Quiet Move With Loud Global Consequences
Japan raising rates is a global funding headline. For years, the yen has been the cheapest place on earth to borrow. That’s how a huge amount of global risk taking was financed…borrow yen, buy higher yielding assets elsewhere. As long as markets were calm and yield gaps stayed wide, being short yen paid well and felt safe.
That’s why the yen kept weakening. Not because Japan was collapsing, but because the world was rewarding leverage.
When Japan nudges rates higher and hints it may stop protecting its bond market as aggressively, that cheap funding starts to disappear enough to change behavior.
And the timing couldn’t be worse. If the global economy is already slowing…Japan, the U.S., the U.K., all at once then investors aren’t looking to add risk. They’re looking for exits at the same time.
The yen is the transmission channel
The real danger is what happens if the yen stops falling and starts rising in a global downturn.
Carry trades don’t unwind politely. They unwind when FX moves against them. Once the yen strengthens, funding costs jump, losses pile up, and positions get cut. That selling pushes the yen higher, forcing more selling. It’s a feedback loop.
Up to now, the lack of sustained stress let this trade persist. In a synchronized recession, volatility rises everywhere at once. That’s when the yen flips from funding currency to pressure valve.
Japan is also one of the world’s largest exporters of capital. If domestic yields become more attractive and FX risk feels less one sided, Japanese institutions don’t need to reach as far abroad, exactly when everyone else is trying to derisk too.
What this does to U.S. and U.K. bonds
People assume recession means yields fall. Often true…until the plumbing gets stressed.
If Japan normalizes while the U.S. and U.K. slide into recession, you can get weaker growth expectations but less reliable foreign buying of long dated bonds. That’s how term premium creeps back in even as growth fades.
In a more disorderly scenario, it’s worse. When leverage comes off quickly across regions, markets sell what’s liquid, not what’s risky. Treasuries and Gilts are liquid and they’re collateral. In a scramble for cash, even safe bonds can sell off temporarily because they’re used to meet margin calls elsewhere.
That’s how you get recession and stubbornly high long end yields for a time.
The trade and tariff backdrop makes this harder
Japan can’t lean on exports the way it used to. Tariffs, weaker global demand, and China’s competitiveness are already pressuring its export model. That pressure helped weaken the yen during the carry phase but it also leaves Japan more exposed if conditions tighten suddenly.
In a global recession, export weakness feeds directly into profits and confidence. A stronger yen in that environment tightens real conditions fast.
That’s why Japan’s policy path is fragile. Hiking supports the currency, but tightens into a synchronized slowdown. That tension is what turns Japan into a transmission hub.
What to watch for and the real breakpoints
This doesn’t break gradually. It breaks when things move too fast.
A sharp yen rally matters more than levels. JGB volatility matters more than yields. FX hedging stress matters more than central bank words. And if U.S. or U.K. bond volatility feeds on itself during recession, policymakers get dragged back in whether they want to or not.
The big risk people are missing
Japan’s hike is about tightening the world’s funding system at the worst possible moment.
The underappreciated risk is a yen led deleveraging wave during a synchronized recession forcing selling of U.S. Treasuries and U.K. Gilts for collateral reasons, pushing yields higher right when recession logic says they should fall.
That’s how market stress comes first and policy response second.
That’s the setup Japan is quietly reintroducing.
“The Bank of Japan is moving[...]
Offshore
EndGame Macro 🇯🇵 Japan’s Quiet Move With Loud Global Consequences Japan raising rates is a global funding headline. For years, the yen has been the cheapest place on earth to borrow. That’s how a huge amount of global risk taking was financed…borrow yen,…
to raise its policy rate at the Dec. 18-19 monetary policy meeting with a 25-basis-point increase from 0.5% to 0.75% emerging as the leading option, Nikkei has learned.” 👇🏼 https://t.co/qWtkjhfk5s - Kalani o Māui tweet