Invariant Perspective

We've been hearing about the "collapse" in Treasuries for decades. For some (strong) reason, such predictions never come to fruition...

Norway is reversing its mistaken 2016 decision to give every student an iPad, which damaged education immediately. Many countries are going back to books and handwriting. I hope many American schools will go back to analog next September, and let's see if that works for us too:

Netflix, HBO Max, other streaming services' subscribers revolt over' jacked-up prices: 'I'm done' trib.al/0csdIEL

🦔Weekly jobless claims fell 11,000 to 207,000, below the expected 215,000. Continuing claims rose 31,000 to 1.818 million. The Fed's Beige Book noted firms are increasingly preferring temporary and contract workers over permanent hires, citing the Iran war as a major source of uncertainty affecting hiring, pricing, and capital investment. Manufacturing output dipped 0.1% in March despite growing at a 3.0% annualized rate in Q1. Unemployment for 20-to-24-year-olds sits at 6.4% against an overall 4.3%. My Take The low claims number looks stable but the Beige Book shift toward temporary and contract workers is how labor market weakness develops before it shows up in the headline data. You don't see layoffs because companies aren't cutting permanent staff yet. You see it in declining hiring and more temp work, which eventually shows up in continuing claims as short contracts expire. High Frequency Economics noted it took about three months after the 1973 oil shock for unemployment claims to start rising meaningfully. We're roughly six weeks into sustained elevated oil prices from the Iran war. The Fed is caught between inflation from the energy shock and a softening labor market. Cutting rates into an oil price shock accelerates inflation. Holding rates while the economy slows risks the labor market deteriorating faster than the current data suggests. Neither option is clean and the window to act before conditions force the decision is narrowing. Hedgie🤗

Arab media are now openly discussing the collapse of the Islamic Republic and what is going to happen next. Unbelievable, just two months ago. A hint.

Private credit fundraising is going great

20-30 cents back to LPs. Five years in. 2020-2021 vintage. These are the funds that deployed at zero rates, peak multiples, and maximum leverage. Software was a third of the deals.

Just 12 stocks, or 2.4%, joined the index in making a new high.

The S&P 500 $SPY recovered from a 9% pullback in under 3 months. It hit a new high with few of its stocks participating (net new highs or above moving averages). There has been only one precedent since 1928. People tend to take this kind of thing waaaay too far. Still...noted.

QVC filing Chapter 11 to restructure $5B in debt. A cable TV shopping company in 2026. The business model was disrupted a decade ago. $QVC

If you think Private Credit is terrible for investors, check out Fund of Hedge Funds products from major bank wealth managers with billions in AUM. The client gets charged 670bps to enjoy a 3.4% return over cash over the last few decades.

Houston’s Commercial Real Estate Crisis. When the extend and pretend on a $470 Million loan doesn’t work “…The nearly half-billion-dollar loan tied to two downtown Houston office towers was flagged for special servicing.  New York-based Brookfield Properties is at risk of defaulting on the $470 million commercial mortgage-backed securities loan for One and Three Allen Center, Morningstar Credit reported… Barclays Capital Real Estate and Citi Real Estate Funding originated the loan used to refinance the property in 2021. It was set to mature in April 2023, but Brookfield secured three one-year extensions, pushing the maturity date to Apr. 9….” - @trdny therealdeal.com/texas/2026/04/…

No risk assets survive this scenario since everything is collateralized by the said Treasuries. Counterparty risk will be a thing as well. Only hedges are off-the-grid assets under physical/self custody.

I've been on twitter/x since 2011. At major market bottoms, almost no one wants to buy. If you post anything remotely bullish, you get relentlessly dunked on. I remember this personally and vividly during the 2015 double bottom, March 2020, Fall 2022, and April 2025. Today’s sentiment feels very different from those moments. Not that this informs the investment process in any direct way, just food for thought.

NETFLIX $NFLX Q1’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $12.25B (Est. $12.17B) 🟢; +16% YoY 🔹 EPS: $1.23 (Est. $0.79) 🟢; +86% YoY 🔹 Operating Income: $3.96B; +18% YoY 🔹 Free Cash Flow: $5.09B 🔸 Reed Hastings to leave board when term ends Q2 Guide: 🔹 Revenue: $12.57B (Est. $12.63B) 🔴; +13.5% YoY 🔹 EPS: $0.78 (Est. $0.84) 🔴 🔹 Operating Income: $4.11B 🔹 Operating Margin: 32.6% 🔹 Net Income: $3.33B FY26 Guide: 🔹 Revenue: $50.7B to $51.7B (unchanged) 🔹 Operating Margin: 31.5% (unchanged) 🔹 Free Cash Flow: ~$12.5B Other Metrics: 🔹 Ads revenue: ~$3B in 2026; up 2x YoY 🔹 Advertising clients: 4,000+; +70% YoY Financials: 🔹 Net Income: $5.28B 🔹 Operating Margin: 32.3% 🔹 Cash & equivalents: $12.3B 🔹 Gross debt: $14.4B Capital Return: 🔹 Share repurchases: 13.5M shares for $1.3B 🔹 Remaining buyback authorization: $6.8B Commentary: 🔸 “We continue to project 2026 revenue of $50.7-$51.7B and an operating margin of 31.5%.” 🔸 “Our primary internal quality engagement metric hit an all time high in Q1.” 🔸 “Our advertising revenue remains on track to reach $3B in 2026, up 2x year-over-year.”

For the internal audience: “Don’t worry, nothing’s really changed.” For the external audience: “Look! We’ve really changed!”

Seems legit.

From SCHW call today: “Our traders are feeling more uncertain about the geopolitics about… the economy… they are taking smaller positions, holding them for less duration because they have less conviction. And so they are trading more frequently as a result, but because they’re smaller trades, they are generating less revenues per trade.”

NEW REPORT: Canada has now experienced six consecutive quarters in which business exits have surpassed new business creation. -CFIB We're in a lot of trouble here. Those are the job creators. Elbows to the MF'ING SKYYY!! 🎉🎉

what if we tracked the change per decade of some basics...wonder what we'd see? 25-54yr/old population (blue columns) 25-54yr/old employees (dark blue columns) 55+yr/old population (grey columns) 55+yr/old employees (white columns) US marketable federal debt (red columns) US total energy consumption (yellow columns, Quadrillion BTU). Would we see any trends (particularly when we know almost all net population growth through remainder of decade will be among the eldest of the 55+yr/olds).