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My personal framework for understanding economic cycles, what's happening now, and how I'm positioned.
Current Read
Late Cycle
Fragility extreme (DRG 93/100). Timing not triggered (LIG 12 · RPI 9.9%).
Risk Score
59/100
Regime Outlook
Caution
Regime ARMED, not triggered. AI chain gauge CDG is FIRED at 76.
Next 3–6 Months
Higher volatility, more downside risk.
As of Nov 15, 2026 · Computed daily from the Seven gauges and the indicator watches.
Simple, evidence-driven reads on where we are in the economic cycle and what to watch next.
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Founding $12/month · Standard $19/month · Annual $190/year
See the daily Brief →Today's verdict
Fragile, with credit stress still contained
What changed
| Indicator | Reading | Cadence |
|---|---|---|
| RPI | 8% | Monthly |
| LIG | 12 | Monthly |
| FSM | 33 | Monthly |
| RPS | −0.4% | Daily |
| DRG | 93 | Monthly |
| CSG | 39.2% | Monthly |
| CDG | 76FIRED | Daily |
A compact preview of the daily email. The complete sample brief is on the Brief page.
All seven gauges, both risk scores, and public warning states remain free. You're paying for interpretation and convenience, never access to the readings.
Seven gauges, each plotted against its own line. Distance past the line is the riskier side.
Readings as of Nov 15, 2026
Today: RPI +1.9
Mean of five extremity percentiles (expanding, no look-ahead): CAPE, Buffett trend deviation, household equity allocation (37.8% of total household assets, Fed Z.1 — the positioning gauge), top-10 concentration (range-normalized across sourced anchors; no continuous official series exists), and margin leverage (FINRA/NYSE margin debt YoY growth, 1959+).
93 vs line 85 — 8 points past the line
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
The first six indicators watch the whole market. CDG watches one chain: in the AI buildout, a small number of private hubs (today, effectively OpenAI) have signed purchase commitments now measured in the hundreds of billions; those commitments are financed in part by the hub's own suppliers and investors, and public neoclouds have borrowed against them.
76 vs line 60 — 16 points past the line · State: FIRED
CIR is provisional (velocity-scored; intensity not computable). MKT is not in the level — it drives the state. Layer scores are on a 0–100 scale and do not sum to the headline level.
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
Since Nov 2026 the gauge is computed daily from State Street's official SPY holdings file — the index's own published weights, with dual share classes combined by issuer (Alphabet counts once) — so the current reading no longer waits on anyone's research note.
38.7% vs line 42% — 3.3 percentage points on the safer side
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
Expected next-10-year real total return as an equal-weight blend of three legs, each fit by its own regression to the same target (forward 10y real total return, Shiller data): log-CAPE, the Buffett indicator's deviation from its long-run trend (Fed Z.1 equities over GDP), and ECY — the CAPE earnings yield minus the ex-post real 10-year yield.
0.8% vs line 0% — 0.8 percentage points on the safer side
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
Logistic probability that a recession begins within 12 months, from five standardized features: 10Y-3M spread (long-history GS10 minus TB3MS), Sahm, industrial production 6m change, building permits YoY, payroll 6m growth.
9.9% vs line 20% — 10.1 percentage points on the safer side
Reading as of Nov 15, 2026 · Since yesterday: +1.9 · Full detail →
Credit channel, 0-100: a widening leg that takes the worse of Baa-Aaa widening from its 12m low and HY daily widening from its 6-month low (the HY leg exists from Oct 2023, FRED's ICE window; before that, Baa carries the history), plus spread level and NFCI.
33 vs line 60 — 27 points on the safer side
No logged series in the current window. Previous reading (Nov 14, 2026): 33 — unchanged.
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
Labor only, 0-100: Sahm scaled (0.50 = full weight), claims YoY, payroll 6m momentum, temp-help YoY (1990+). Pure labor, because every postwar recession is ultimately a labor event and labor is where false alarms go to die.
12 vs line 60 — 48 points on the safer side
Reading as of Nov 15, 2026 · Unchanged since yesterday · Full detail →
Distance is in each gauge's own points or percentage points. For expected real return, lower is riskier. The CDG line at 60 arms the watch; a separate rule determines when it fires. Select a gauge for its history and detail.
Two model dials from the CVETF framework, computed by the weekday indicator watch from 10-year percentile ranks and EMA-smoothed. Updated with the daily snapshot.
Risk Dial · R(t)
59/100
Composite risk dial, 0-100: credit, labor, growth, market, inflation and tail-risk percentiles, smoothed.
Credit Sub-Dial · C(t)
71/100
Credit sub-dial, 0-100: HY/IG/Euro HY/CCC spreads, private-credit defaults and bank lending standards, smoothed.
As of Nov 13, 2026
Ranked slow-moving fault lines that standard gauges can miss, from the November 2026 volcano hunt. Eruption means the fault becomes a first-order macro or market event within 24 months. Probabilities are judgment ranges from the research; each size figure keeps its measured, estimate, or contested label. As of Nov 1, 2026. Editorial assessment, not a live feed. Click a card for the mechanism and the strongest counter-argument.
AI financing complex
Size. AI-related debt ~$1.03–1.07tn; 2026 hyperscaler capex guided ~$630–800bn [Estimate]. Off-balance-sheet SPV borrowing >$120bn in 18 months [Measured].
Trigger. Frontier-model revenue disappointment, a hyperscaler capex guide-down, or GPU rental prices collapsing.
Watch. Hyperscaler capex & FCF (filings); Oracle RPO concentration; CoreWeave debt & GPU rental price indices; the CDG gauge above.
Mechanism ›Mechanism. Vendor financing plus circular equity. Chipmakers invest in and guarantee customers; customers sign take-or-pay leases; SPVs borrow against those leases; private credit and insurers fund the SPVs; hyperscaler cloud revenue is partly their own capex returning as customer spend. GPUs depreciate in 3–6 years while the debt and power infrastructure amortise over 15–40. This is 1999 telecom vendor financing at roughly 30–50 times the scale.
Transmission. Capex is now a measurable share of GDP growth, so a capex stop is a demand shock. The borrowers, lenders, landlords, and chip suppliers are the same names that dominate the equity indices, so correlation goes to 1 inside the index itself.
Strongest counter. Unlike 2000, the core hyperscalers are among the most profitable companies in history and fund most capex from operating cash flow; much capacity is pre-leased to creditworthy tenants. A 2000-style equity bust without a 2008-style credit event is a coherent, arguably base, case.
Private credit / insurer nexus
Size. Global private credit ~$1.5–2.0tn [Estimate range]. About 40% of borrowers have negative free cash flow, up from 25% in 2021 [Measured, IMF].
Trigger. A redemption wave meeting gated funds, a large sponsor-backed default cluster, or an insurer regulatory action on affiliated offshore assets.
Watch. KBRA DLR and Fitch private-credit default & PIK indices; BDC PIK income share and non-accruals; redemption requests vs caps in fund filings.
Mechanism ›Mechanism. Opacity, PIK income, and retail-isation. Reported defaults run ~2% versus effective defaults of ~5–6.4% including selective defaults and liability-management exercises. In 2026 semi-liquid retail vehicles hit redemption caps across major managers, and one Blue Owl fund halted redemptions permanently. US life insurers allocate ~30% of invested assets to private assets, with PE-owned insurers running originate-to-own-affiliate structures where valuation, origination, and ownership sit in one group.
Transmission. Banks (credit lines plus ~$300bn direct), insurers and annuitants, retail wealth channels, and sponsor-owned employers. If one manager's marks are doubted, all are — informational contagion.
Strongest counter. Private credit is only ~2.8% of US private-sector liabilities; most capital is locked-up institutional money that cannot run; fund-level leverage is modest versus 2008 banks. A painful 8% default cycle is absorbable — it becomes systemic only via the bank, insurer, and retail channels, which is why those channels are the watch item.
US fiscal / term premium
Size. Debt held by the public crossed 100% of GDP in June 2026; FY2026 deficit ~$1.9–2.1tn [Measured / contested range]; net interest ~$1.0tn a year.
Trigger. A failed or very weak Treasury auction, a debt-ceiling accident, an inflation re-acceleration forcing hikes into this supply, or a foreign-buyer strike.
Watch. Treasury auction tails and indirect-bidder share; NY Fed ACM term premium; net interest as a share of revenue.
Mechanism ›Mechanism. r > g arithmetic with a primary deficit near 2% of GDP. Every point of yield the market demands raises issuance, which raises the yield demanded. Market functioning is the fragility — 2019 repo and March 2020 showed Treasury depth can vanish. In Sep 2026 the Treasury tripled buybacks to $6bn and long yields rose on the news, the dress rehearsal for a repricing.
Transmission. The Treasury yield is the discount rate for everything else on this page. A term-premium repricing is simultaneously a fiscal, equity-multiple, mortgage-rate, and CRE-refinancing event. This is the volcano whose eruption triggers the others.
Strongest counter. No fixed debt ratio triggers crisis for the reserve-currency issuer borrowing in its own currency; auctions through Oct 2026 drew normal demand and Treasuries rallied as a haven in the October sell-off. The risk is a repricing, not default — but a repricing is damaging enough on its own.
Concentration / valuation amplifier
Size. CAPE 40.7, 98.9th percentile since 1881; top 10 companies ~39% of the S&P 500; households hold a record 48.2% of financial assets in equities; margin debt $1.48tn [Measured].
Trigger. Anything else on this list erupting, or an earnings disappointment in the top-10 names — which are also the AI borrowers of Rank 1.
Watch. Fed Z.1 household equity allocation; FINRA margin debt; the CSG and DRG gauges above.
Mechanism ›Mechanism. Not a standalone volcano — the transmission belt that converts any other eruption into a demand shock. A 25–35% equity drawdown, the CAPE mean-reversion zone, hits the cohort that does roughly half of consumer spending, while margin calls force mechanical selling at the margin. The top 10% of households own 87–88% of equities, and top-decile investment-to-checking transfers now fund over 10% of their spending — the wealth effect is financing current consumption.
Transmission. Wealth-effect consumption reversal; margin and leveraged-ETF deleveraging; retirement-account confidence effects.
Strongest counter. Household assets-to-debt is above 10:1; even a 20% equity fall leaves it higher than at any time before late 2025. Most equity sits in retirement accounts that historically are not panic-sold, and excess CAPE yield is still positive — equities are less stretched versus bonds than in 2000. Valuation predicts poor 10-year returns, not a crash.
Leveraged loans / software distress
Size. US leveraged loans ~$1.5tn; $65bn trading below 60 cents, the most since Mar 2020; software alone $25–40bn distressed, a record [Measured].
Trigger. The 2027–28 software maturity wall meeting a closed refinancing market, or a marquee sponsor default.
Watch. Morningstar LSTA share of loans below 80 cents and LME share; CCC spread (ICE BofA); JPMorgan distressed tallies.
Mechanism ›Mechanism. 2020–21 LBO software deals were underwritten on perpetual ARR growth at 6–7 times leverage; AI now attacks exactly that ARR assumption, while floating rates keep debt service high. Covenant-lite structures remove the early tripwire, so distress is restructured rather than defaulted — liability-management exercises are 64% of combined defaults plus LMEs — and losses arrive later and larger, concentrated in CLO mezzanine and equity and in the insurers and private credit that fund CLOs.
Transmission. CLOs to insurers, banks, and Japanese holders; sponsor portfolio-company employment; private-credit marks on the same borrowers.
Strongest counter. Payment defaults remain under 1%; CLO structures survived 2020 and AAA tranches have never lost historically; distress is heavily one sector's repricing rather than broad deterioration. Loan prices below 80 have repeatedly marked buying opportunities when the macro held.
France / euro sovereign-bank loop
Size. OAT–Bund 10-year spread above 140bp, widest since 2012 and wider than Italy or Greece; French debt ~119–120% of GDP; deficit 5.4% of GDP [Measured].
Trigger. Budget failure or government collapse, a rating-downgrade cascade, or the 2027 election pricing a fiscally expansionist winner.
Watch. OAT–Bund spread and auction bid-covers (Agence France Trésor); French bank CDS; ECB TPI signalling.
Mechanism ›Mechanism. The 2011 loop in the core. Fiscal slippage widens spreads; French banks holding OATs take balance-sheet damage (their CDS already widening, Italian CDS following); credit tightens; growth and the deficit worsen. France is too big for an ESM-style rescue — the ECB's TPI is the backstop and its activation is political. Market depth is more than 50% below normal.
Transmission. Euro bank equities and CDS into global bank funding; the euro; European credit creation; US multinational earnings.
Strongest counter. 2012 spreads reached ~190bp without a French default; the ECB now has TPI and PEPP flexibility that did not exist in 2011; much of the 2026 widening was a positioning shock rather than pure fundamentals. Eruption means a spread crisis requiring ECB action, not a euro breakup.
CRE / regional banks
Size. $875bn of commercial mortgages mature in 2026 and $652bn more in 2027; office CMBS delinquency 12.2%, second-highest ever [Measured, Trepp].
Trigger. The wall itself if the 10-year stays above 5%, or a regional-bank earnings miss that forces marks.
Watch. Trepp CMBS delinquency, especially office; MBA maturity survey; Fed H.8 bank CRE delinquency; SLOOS CRE standards.
Mechanism ›Mechanism. 2019–21 loans written at 3–4% refinance at 6–8% against lower net operating income and values down 50% or more in some office markets — DSCR failure, maturity default, then extend-and-pretend or loss recognition concentrated in regional and community banks. Extensions are being granted at below-market rates, which delays but enlarges the reckoning.
Transmission. Regional bank capital into local lending contraction — the 1990–91 credit-crunch channel; CMBS investors including insurers; municipal tax bases.
Strongest counter. The most telegraphed wall in history. Lenders have extended for three years, regional-bank net charge-offs clustered at just 29–51bp in Oct 2026 earnings, and losses are arriving slowly enough to be earned against. Multifamily and industrial are not office. Slow bleed, not eruption.
Japan carry unwind
Size. Carry scale is the widest measurement gap on this list — ~$250bn leveraged (BIS) to ~$2.3tn on a broad proxy (Jefferies) [Contested]. BOJ policy rate 1.25%, highest in 31 years.
Trigger. Hawkish BOJ guidance on the terminal rate, or a sharp yen spike through intervention levels starting the buy-back mechanically.
Watch. CFTC yen positioning; TIC Japanese Treasury holdings; USD/JPY realised volatility; long-end JGB auctions.
Mechanism ›Mechanism. August 2024 proved the loop: a 25bp BOJ surprise plus soft US data sent the yen up 12% in under four weeks and forced global deleveraging. The trade rebuilt because the differential remained — and each BOJ hike now lands on a larger stock. Leveraged funds were net short ~102k yen futures contracts in late July 2026 with USD/JPY briefly at a 40-year yen low.
Transmission. Forced selling of US and European assets, including Japanese Treasury holdings at the margin; CLO demand (Norinchukin, the largest single CLO holder at ~$54bn, increased holdings after $9.3bn of losses — a concentrated node); EM carry unwinds.
Strongest counter. Japan is ~90% domestically funded, pension holders are unlevered, and banks sit on over ¥400tn of surplus cash as natural JGB buyers. There is no levered forced seller of LDI scale. Episodic volatility is likely; a structural unwind is a grey swan, and the 2024 episode itself healed in weeks.
Consumer credit tail
Size. Card balances 90+ days delinquent at 13.1% in the NY Fed panel, highest since 2011 — while bank-reported card delinquency fell to 2.85% [Measured, both]. Subprime auto 60+ at series highs (Fitch).
Trigger. Labour-market softening hitting the same lower-income cohort, or ABS funding spreads widening for subprime issuers — historically the kill-switch.
Watch. NY Fed Household Debt & Credit early-stage transition rates; FRED DRCCLACBS; Fitch ABS delinquency indices.
Mechanism ›Mechanism. K-shaped exhaustion. Lower-income households financed post-2021 inflation with revolving credit at 22%+ APRs; early-stage transitions feed serious delinquency with a two-to-three-quarter lag — the 2006 pattern in miniature. Student-loan serious delinquency is back above 10% as repayment restart bites, and BNPL risk is migrating to outside buyers, including private credit and insurers.
Transmission. Direct losses are small versus bank capital. The channel is consumption — bottom-quintile spending retrenchment — and subprime lender and ABS funding.
Strongest counter, and it is strong. The two card series measure different universes. The NY Fed panel shows crisis-level tails; bank data show delinquency falling for five straight quarters and the flow into serious delinquency flat year over year, because the mortgage book — two-thirds of household debt — is clean, fixed at low rates, with large equity cushions. On bank data, the consumer crack already peaked in 2024 and is healing. The tail stress is real and persistent; an aggregate consumer crisis is not in the 2026 data.
China LGFV / property
Size. Local-government plus LGFV debt ~90% of GDP at end-2025, LGFV alone ~51%; LGFV interest coverage below 1.0 [Measured, IMF]. Land-sale revenue has more than halved from peak.
Trigger. A disorderly LGFV default breaking the implicit-guarantee assumption in a weak province, or a policy error at the June 2027 platform-exit deadline.
Watch. LGFV bond spreads by province (Wind/ChinaBond); NBS property investment, starts, and prices; Ministry of Finance land-sale revenue.
Mechanism ›Mechanism. A balance-sheet recession managed by swap-and-extend. Growth drags, PPI deflation is exported through excess capacity, and fiscal capacity is consumed by debt service at exactly the moment stimulus is needed. About 63% of 2026 local bond issuance merely refinanced the past.
Transmission. Mostly slow for the US — commodity and EM demand, multinational earnings, deflationary goods prices. Financial contagion is limited by capital controls and state ownership of banks; losses can be socialised over decades, Japan-1990s style.
Strongest counter. This volcano has been erupting for five years and the state has demonstrated both the tools and the willingness to stretch resolution over a decade. The risk to a US reader is a growth and deflation headwind, not a Lehman moment.
Secondary watch
Nonbank mortgage servicers
Size. Nonbanks service 66% of the loans in more than $9tn of Ginnie Mae / GSE securities, up from 27% in 2014, and originate 76% [Measured, GAO].
Trigger. A delinquency spike forcing servicer advance obligations up precisely when warehouse lenders pull lines.
Watch. Ginnie Mae issuer financials and PTAP usage; MBA servicer advance data; delinquency in Ginnie Mae pools.
Mechanism ›Mechanism. Nonbank servicers must advance principal, interest, tax, and insurance on delinquent Ginnie loans from their own liquidity, funded by short-term warehouse lines that can vanish in downturns — with no federal prudential regulator. GAO found monitoring gaps at Ginnie Mae and FHFA, and the liquidity backstop FSOC recommended in 2024 does not yet exist. A large servicer failure means servicing transfers, borrower harm, Ginnie fiscal exposure, and an origination shutdown for exactly the borrowers with no alternative.
Strongest counter. The sector survived its true stress test in 2020 without a major failure, and capital and liquidity standards have since been raised. Probability is low — but this is the candidate where a failure would most surprise consensus, SVB-style.
Housing lock-in / insurance shock
Size. Insurance premiums up 46% since 2021, Florida averaging $6,800–8,000+ per year [Measured / Estimate]. About 80% of mortgaged owners still hold rates below 6%.
Trigger. A major hurricane season landing on a thin, reinsurance-dependent Florida market, or a large carrier withdrawal.
Watch. Florida OIR carrier actions and Citizens policy count; ICE / Insurify premium indices; FHFA and Case-Shiller prices.
Mechanism ›Mechanism. Not a default volcano — mortgage delinquency is low and equity cushions large. It is a transactions and mobility freeze plus a regional cost shock. Insurance non-renewals can make homes unmortgageable in coastal Florida, Louisiana, Texas, and California, forcing cash-only discounts, while locked-in owners cannot move for jobs — a labour-market efficiency loss that compounds other frictions.
Strongest counter. No leverage, no forced sellers, large equity, and prices flat rather than falling nationally for a year. This is an affordability and regional insurance problem with no plausible path to a national financial crisis on its own within 24 months — though a severe regional event, such as Florida post-hurricane, is a coin flip.
Headlines the watches are tracking, newest first. Links go to the publisher; the note under each is ours.
Private credit
112 borrowers in KBRA's default monitor, a record; stress concentrated in the lower middle market at 5.8%.
AI credit
CoreWeave 5Y CDS spiked above 1,289 bps on Nov 5 before easing to about 1,155; protection costs also climbing on hyperscaler paper.
AI chain
Non-renewal of rented Oracle capacity plus Nscale and IREN pullbacks; logged on Taslos as the first CDG Type-4 hub event.
Markets
Nov 5 rout: Nasdaq -1,422 points, its largest single-session point loss on record; the piece leads with the bond market's AI-buildout warning.
Policy
Incoming governors in Texas, Ohio and Georgia campaigned on restricting data centers; states that could restrict hold roughly 45% of planned US capacity (Goldman estimate).
Labor
Payrolls roughly 100k above consensus with upward revisions; labor gauges stay calm even as credit tiers deteriorate.
Private credit
Record 121 downgrades (rate 11% to 15%); 31% of new assessments at ccc+ or lower, up from 19% in Q2.
