Happy New Year to You and Your Family!
As always, I prefer to add a little insight in my posts, and here’s what we found about the US Economy, and what we are doing about it.
The White House is shouting about a Golden Age while the Federal Reserve is quietly breaking out the emergency plumbing tools for the first time since 2020. We’re seeing 4.3% GDP growth paired with a labour market that’s essentially flatlining. It is a decoupling that traditional models can’t explain, but our Eco-economics framework predicted. The system is cannibalizing its own foundation to keep the headline numbers shiny.
In this deep dive, you’ll get:
The truth behind the Jobless Expansion and why your portfolio is likely overpaying for digital smoke.
A breakdown of the $12.6 trillion repo market stress and the Silver Squeeze that almost broke a bullion bank.
The Jevons Paradox in AI: Why efficiency is actually driving a massive, unpriced energy and capital burn.
Our current Helix Position: Which Boring Giants we’re using as anchors and why we’re shorting the AI workslop factories.
The Hollow Expansion: Why I’m Not Buying the Golden Age Brochure
Back in Nov this year, I sat through a pitch for a US energy firm, that featured more pictures of industrial growth, and technological progress, than actual balance sheets. When I looked through the brochure, I read that the US economy would grow at 5% annualy from 2025 to 2030, yet we were already into 11 months of a slowing/ declining economy by then.
I asked the investment banker about the disconnect. He gave me a word salad of proprietary weightings and macro models.
Translation? He was ticking boxes, not analyzing reality. That was the day I realized most “modern” investing is just a marketing gimmick sold at premium fees. Fast forward to today, and the brochure is titled “The American Golden Age,” but the data tells a story of structural decay.
The Statistical Ghost: GDP Growth vs. Labour Market Decay
The headline says 4.3% GDP growth for Q3 2025. On paper, it’s a miracle. In reality, it’s a statistical mirage fueled by defensive government spending and a top-heavy AI boom. While output surged, the labour market added a measly 64,000 jobs in November—a net change of basically zero since April. We are living through a “Triangular Conflict” where financial success is actively cannibalizing social stability. Firms are “doing more with less” not because they are efficient, but because they are terrified of the 17% effective tariff rate—the highest since the 1930s—and are lean-burning their workforce to protect margins. If you’re betting on broad-based consumption, you’re ignored the fact that long-term unemployment is at a three-year high. The economy is building digital cathedrals while the physical infrastructure of housing and manufacturing withers.
The Plumbing is Leaking: Repo Markets and the Silver Squeeze
Don’t believe the “everything is fine” narrative coming out of Washington. On December 22, the Fed conducted its first repo operation since 2020, injecting $6.8 billion into a system that was supposedly “ample” with reserves. Over ten days in December, they deployed $38 billion. Why? Because the underlying plumbing of the $12.6 trillion repo market is under extreme duress. The fragility was tested during the “Silver Squeeze” late this month. Rumors of a “systemically important bank” failing a $2.3 billion margin call sent silver prices into a feral 11% intraday plunge as leveraged traders were liquidated. The physical market has decoupled from the “paper nonsense” of the exchanges. While the Fed calls these “routine technical measures,” our Quantamental model sees a system where the “Boring Anchors” are being weighed down by opaque, volatile derivative liabilities.
The AI Reckoning: Jevons Paradox and the “Workslop” Factory
AI in 2025 is the quintessential “Green Unicorn.” The market has overpaid for a productivity story while ignoring the Jevons Paradox: as we make computing more efficient, total consumption is actually skyrocketing, not falling. Daily API calls to major AI models increased 50-fold this year, driving energy consumption for data centers up by 25% year-over-year. Corporations like Alibaba are reporting massive negative free cash flow (RMB 21.8 billion) because they are throwing money into AI infrastructure that has resulted in an 85% plunge in operating income. Inside the office, the “AI revolution” is mostly producing “workslop”—low-quality outputs that take more human time to fix than to create from scratch. We don’t guess; we measure the 5-year CAGR of Free Cash Flow. Right now, most AI-heavy balance sheets look like cash-burning furnaces.
Helix Position: Fading the Hype, Anchoring in Reality
The market is emotional, which makes it inefficient. It overpays for stories (AI, “Golden Ages”) and underpays for boring reality. We aren’t chasing the rally; we’re trapping it with a Barbell Strategy.
What We Are Doing: We are holding “Low Beta Anchors” like Verizon (VZ) and BAE Systems (BAESY). These generate cash flow like clockwork regardless of trade wars. On the other side, we are hunting “Deep Value Engines” like SITE Centers (SITC), trading at a staggering 83% discount to fair value, and The Andersons (ANDE), which is targeting a 36% EPS CAGR through 2028.
The Short Book: We are shorting the hypocrisy. We’re betting against firms that scrapped their 2030 eco-targets the moment it got hard—looking at you, BP and Shell—and AI players whose capital spend is a one-way trip to negative FCF.
What’s your take? Are you buying the “Golden Age” narrative, or are you seeing the same cracks in the plumbing that we are?
Happy New Year, and Look Forward to more interaction in 2026!!
References
US Bureau of Economic Analysis, Q3 2025 GDP Initial Estimate.
US Bureau of Labor Statistics, November 2025 Employment Situation.
Federal Reserve Bank of New York, Repo Operations Data December 2025.
Yale Budget Lab, 2025 Effective Tariff Rate Analysis.
Jevons Paradox and Modern Energy Efficiency, Wikipedia/Economic Reports.
Alibaba Fiscal Q2 2026 Earnings Report Summary.
SITE Centers Corp. Valuation Analysis, Simply Wall St/Morningstar.
The Andersons 2025 Investor Day Growth Strategy.
DevelopmentAid Report: Major Companies Retreating from Climate Goals 2025.
