A multiple of TARP does not exist on the $10 trillion US life and annuity balance sheet. Everyone thinks this will be a siloed credit crisis. They do not understand the depth of it.
Thank you for your work Nick. I enjoy reading your updates. These forces are like steroids in sports. Once players see that usage is not penalized, they all realize they have to juice or they are cut. These market forces virtually guarantee that your samples reflect the entire industry’s practices.
Some truths must be foretold, told, and retold if they are to survive. Maybe this foretelling will at some point in the cycle break through… but everything is such a shitshow right now that it’s probably wisdom-to-know-the-difference time.
There’s a pattern here that shows up in markets long before it ever shows up in headlines. The structure looks stable, the ratios look fine, the surface feels calm—and underneath, the entire thing is leaning on assumptions nobody is forced to verify.
You see it when a level holds not because buyers are strong, but because nobody has tested it hard enough yet. It looks like support. It behaves like support. Until one day it doesn’t—and when it breaks, it doesn’t drift lower, it collapses because there was never real demand underneath it to begin with.
Balance sheets can trade the same way. As long as nobody presses on the weak point, the system carries on. The moment someone does—or the moment the environment forces it—the illusion disappears quickly. Not gradually.
The market doesn’t care how long something held together. It only cares whether it can hold now.
great post, very informative, but even with this knowledge how does one position themselves when we have no control or sense of when the events (which are certain to come) will unfold?
Good work. One would think that sophisticated investors (HFs, short-sellers, Eisman/Burry, et al) would be looking to profit from this issue via the stocks and/or CDS' of the relevant entities. Have you seen any evidence of that from their periodic disclosures (13-Fs)? Thanks
Thank you for your work Nick. I enjoy reading your updates. These forces are like steroids in sports. Once players see that usage is not penalized, they all realize they have to juice or they are cut. These market forces virtually guarantee that your samples reflect the entire industry’s practices.
Some truths must be foretold, told, and retold if they are to survive. Maybe this foretelling will at some point in the cycle break through… but everything is such a shitshow right now that it’s probably wisdom-to-know-the-difference time.
Trying to make the foretold a told
Incredible work
Take em to church Nick!
Gober is the GOAT
Holy fucking shit!!! It really is all nothing but a house of cards built on fault line.
There’s a pattern here that shows up in markets long before it ever shows up in headlines. The structure looks stable, the ratios look fine, the surface feels calm—and underneath, the entire thing is leaning on assumptions nobody is forced to verify.
You see it when a level holds not because buyers are strong, but because nobody has tested it hard enough yet. It looks like support. It behaves like support. Until one day it doesn’t—and when it breaks, it doesn’t drift lower, it collapses because there was never real demand underneath it to begin with.
Balance sheets can trade the same way. As long as nobody presses on the weak point, the system carries on. The moment someone does—or the moment the environment forces it—the illusion disappears quickly. Not gradually.
The market doesn’t care how long something held together. It only cares whether it can hold now.
great post, very informative, but even with this knowledge how does one position themselves when we have no control or sense of when the events (which are certain to come) will unfold?
Nick - I've been building vendor concentration database from SEC 10-Ks
mapping the same Apollo/Athene ($392B) and KKR/Global Atlantic ($219B)
relationships you found. Would love to share what we've extracted and
see if it complements Tom Gober's work. Email me: john@bearspray.ai
Good work. One would think that sophisticated investors (HFs, short-sellers, Eisman/Burry, et al) would be looking to profit from this issue via the stocks and/or CDS' of the relevant entities. Have you seen any evidence of that from their periodic disclosures (13-Fs)? Thanks