Syz the moment

Given the lack of government data, any report gets huge attention... Source: RBC, Bloomberg

Treasury can’t spend because of shut down. QT ends in December, $70B of buying per month. Potential liquidity tsunami is about to hit the system

The New York Fed’s Q3 2025 report shows total household debt rising $197 billion (+1%) to a new all-time high of $18.59 trillion. Here’s the breakdown 👇 🏠 Housing debt: $13.5T 💳 Non-housing debt: $5.1T Key highlights: 🏡 Mortgage balances up $137B → now $13.07T Delinquency: 0.83% (barely up from 0.82%) 💳 Credit card balances up $24B → now $1.23T Delinquency: 12.41%, highest since 2011 🚨 🚗 Auto loans steady at $1.66T 🎓 Student loans up $15B → $1.65T 90+ day delinquencies at 9.4% — surging after repayment resumed 🏡 HELOCs up $11B → $422B 🧾 In total: Non-housing balances rose 1% from last quarter. 📉 Consumer bankruptcies: 141,600 — the most since 2020. 🔍 What’s happening: “Household debt balances are growing at a moderate pace, with delinquency rates stabilizing,” said the NY Fed’s Donghoon Lee. True — but under the surface, cracks are widening. Credit card delinquencies are the highest in 14 years. Student loan defaults are accelerating — especially among borrowers 50+, where 1 in 5 loans is now delinquent. Mortgage resilience is holding — for now — but that may change if housing prices slip and credit tightens. 🧠 Big picture: Consumers are tapped out. The pandemic-era cushion is gone. Credit limits are rising, but so are missed payments.

The Federal Reserve announced it will end Quantitative Tightening (QT) and begin Quantitative Easing (QE) again — calling it a “technical adjustment.” But let’s be honest: That’s easing. And easing into this environment is something we’ve rarely seen in history. Let’s unpack what this means 👇 📉 Normally, QE happens during crisis. Low valuations, weak growth, wide credit spreads, and falling inflation. QE was meant to stimulate into a depression. 📈 This time is different. Stocks are near record highs AI and tech valuations are in bubble territory Unemployment is near record lows Inflation is still above target Credit and liquidity are abundant So if the Fed starts buying bonds and adding liquidity now — while deficits stay huge — it’s essentially monetizing government debt during a boom. That’s not “technical.” That’s a classic late-stage Big Debt Cycle move — where monetary and fiscal policy collide to keep the system afloat. 🧩 The mechanics: QE pushes real yields down Financial assets inflate (especially tech & gold) Wealth gaps widen Inflation reawakens — eventually forcing the Fed to tighten again ⚠️ And that’s when bubbles pop. So yes — the Fed may be stimulating into strength, not weakness. Into a bubble, not a bust. Into risk, not safety. This is the kind of pivot that separates traders from historians.

The ISM Manufacturing Index fell to 48.7 in October, marking the 8th STRAIGHT month of contraction. The US manufacturing sector has been in recession for 34 of the last 36 months. Backlogs of orders have been contracting for 3 years STRAIGHT. Source: Global Markets Investor @GlobalMktObserv

💥 Is there a banking crisis? Nope. 💵 A dollar funding crisis? Not really — at least, not yet. 🏦 Is the Fed secretly doing QE again? Also no. So… what’s actually going on? Here’s the real story 👇 After the U.S. government raised the debt ceiling in June, it started rebuilding its Treasury General Account (TGA) — basically Uncle Sam’s checking account at the Federal Reserve. The target? $850 billion. When money flows into that account, it’s pulled out of the financial system. Think of it as a liquidity drain — cash that could’ve been circulating in markets is now just… sitting there. 💧 Roughly $700 billion has been drained so far. And when that happens, bank reserves fall — which is exactly what we’re seeing today. Reserves are now sitting near multi-year lows (as a % of GDP). Less liquidity = more pressure in dollar funding markets. We can actually see that stress: ➡️ SOFR (the Secured Overnight Financing Rate — basically what banks pay to borrow short-term dollars) has ticked higher. Is it panic time? Not really. The current move is small compared to the September 2019 Repo Crisis, when the entire funding market froze and the Fed had to pivot hard from QT to QE overnight. So no, there’s no crisis — but there is a tightening squeeze in the plumbing of the financial system. Source: Tomas @TomasOnMarkets

Source: BofA, Sam Ro 📈 @SamRo BofA

Through September, U.S. companies cut nearly 950,000 jobs — the highest year-to-date total since 2020 and worse than any full year since the Great Recession (excluding COVID). October alone brought headlines: 💻 Amazon – 14,000 corporate roles gone (AI cited as a factor) 🏪 Target – 1,800 jobs cut ☕ Starbucks – 900 employees laid off 🎬 Paramount – 1,000 roles eliminated Even Southwest Airlines announced its first major layoffs ever. Government jobs made up ~300,000 of those cuts, but tech and retail are taking the brunt. “We’re not just in a low hire, low fire environment anymore. We’re firing.” – Dan North, Allianz Trade The new pattern? AI is accelerating restructuring. 60%+ of executives on LinkedIn say AI will replace entry-level tasks. Companies are trimming labor to protect profits amid tariffs and cost pressures. Job security is no longer guaranteed — even in stable sectors. Source: zerohedge, Bloomberg