Hola Libertinus,

This week, Uncle Sugar got downgraded. Moody’s decided the world’s biggest debtor is now officially a bigger risk than Microsoft.

Markets are jittery. Bitcoin’s suddenly behaving like the adult in the room. Gold’s not moving much. Probably too old to care.

In this edition, West breaks down five financial Signals you don’t want to miss—from the downgrade to the bond market’s quiet panic.

Meanwhile, Zack’s back with dispatches from the Ministry of Culture—

ICE is tapping your HOA’s cameras, birthrates are collapsing, and even billionaires are too spooked to bid on a Banksy.

Let’s get into it.

📡 S I G N A L S

US Government Credit Rating Downgrade

You probably saw the news a couple of weeks ago that, for the first time in history, Moody's downgraded the US government's credit rating. This led to a peculiar situation where even some companies, including Microsoft, were considered more solvent than the US government. US debt is perceived to be a riskless asset in some ways – namely because if the US government ever reached the point where it couldn't pay interest it could always just print more money (of course that introduces other issues, like inflation though). Microsoft can't print money to pay its debts. But Moody's pointed to the unsustainability of the US debt burden as the primary cause for the downgrade. This seems to be a fair point, especially considering that the cost of servicing the US national debt now exceeds the US government’s defense spending. ~West

ICE Taps into Nationwide AI-Enabled Camera Network, Data Shows (404 Media)

Neighborhood cameras—sold to quiet suburbs as tools to catch predators and petty thieves—are quietly doubling as federal surveillance nodes, no warrant necessary. ICE is sidestepping the rules, informally tapping into a nationwide network of HOA-funded spy cams by simply asking your friendly neighborhood sheriff for a favor. Sure, today it's illegal immigration, but tomorrow it might be tracking how often you visit a gold dealer, withdraw cash, or travel a little too freely for Big Brother’s comfort. Orwell warned us, but I don’t think he ever imagined suburban moms would demand we build Oceania willingly—one 'reasonable compromise' at a time. It’s for the children! ~Zack

The Market Reaction to Moody’s Downgrade

Markets were mixed in the week following the news. Many folks in the financial space seemed to largely shrug off the news and questioned why Moody's chose this particular moment to downgrade the US's credit rating. After all, the US has been spending increasingly for decades now. That said, US long term treasuries have been taking a beating for the past few years, and perhaps this will become the straw that breaks the camels back. But where could the market turn to if it does decide to flee US denominated assets? The most obvious answer would be to bonds issued by other large stable governments. But that doesn't seem to be happening - why? ~West

Severe Autism Can Be Reversed, Scientists Claim (The Telegraph)

A new case study out of the University of Maryland claims two non-identical twin girls diagnosed with severe autism at 20 months made dramatic improvements—one to the point of being “indistinguishable” from neurotypical children—through an intensive, holistic intervention program. Their regimen included behavioral therapy, speech work, a cabinet’s worth of supplements, and, perhaps most importantly, a strict gluten-free, low-sugar, organic, local, anti-inflammatory diet that included zero ultra-processed foods or artificial colors or dyes. Maybe RFK Jr. is onto something? ~Zack

The Quiet Panic in the Bond Market

Even though the news cycle has been focused on US bond yields recently, there is a deeper issue brewing beneath the surface. Bond yields have been rising for sovereign debt across the board. This isn't a US problem, its a global problem. Given that yields generally rise with the increased perceived risk of holding a nation's debt, and that yields are inversely correlated with the valuation of previously issued bonds, things don't look good. It seems like markets are losing faith in the ability for nations to repay their debts. Debt crises can happen very quickly, and we aren't seeing anything close to the bond market totally exploding yet, but it is certainly something I'm keeping an eye on. But perhaps the most interesting thing in all of this is where money flowing out of bonds is going to... ~West

The Art Market Is Tanking. Sotheby’s Has Even Bigger Problems. (WSJ)

The elite art market is faltering, with high-value sales declining sharply. Global art sales plummeted by 12% to $57.5 billion, with auction sales of artworks over $10 million dropping a staggering 45%. Notably, a $70 million Giacometti bronze bust failed to sell at Sotheby's, and a Banksy mural estimated at $3 million didn't receive a single bid. When even the ultra-wealthy start to hesitate, you know the bubble's about to pop. So, unless you're in the market for a $50k banana, maybe sit this one out. ~Zack

Bitcoin’s Identity Crisis: Risk Asset or Safe Haven?

There were several days last week where money was flowing out of stocks and bonds and into Bitcoin. This is a peculiar development as Bitcoin has historically moved very similar to tech stocks as a risk on asset. I even saw reputable mainstream news articles claiming that traders were moving into Bitcoin as a way to de-risk out of US stocks and bonds. Wait, de-risk? In Bitcoin? This is the first legitimate evidence I've personally seen of markets treating Bitcoin as a risk-off asset, which is a huge deal. Outside of forex, bond markets are the largest markets in the world, and if Bitcoin began to be viewed as an alternative to bonds, that would pave the way for unprecedented inflows of capital into the asset. But don't get too excited just yet. The trend appeared to last for only a few days, and even though Bitcoin didn't tank once the market perceived US assets as less risky again, it didn't keep shooting to the moon either. This is a longer term trend that I will be following closely. If Bitcoin develops into a risk-off asset class as it grows in market cap, it really would become "digital gold." ~West

Fix Your Glutes. Fix Your Life. (NYT)

Here’s fun one: NYT editor Amy Wang spent two years nursing a cascade of injuries—busted shin, rolled ankles, chronic pain—only to learn the culprit wasn’t bad luck, but bad glutes. Turns out, her weak posterior chain threw her whole body out of whack. The fix? Daily squats. It’s a useful reminder that your body breaks when the fundamentals are weak and you can’t outsource strength. You’ve gotta build it, one rep at a time. Have you done your squats today? ~Zack

Gold Still Doesn’t Care About Your Feelings

What what about good old fashioned physical gold though? It has benefited immensely the past few months from the geopolitical and financial chaos we're finding ourselves in. It seems to actually be soaking up money flowing out of bond markets in a sustained way, but this isn't a new thing. Gold historically has profited from bond market fears, and has served the role of being the ultimate risk off asset. With the first inklings of Bitcoin acting as a risk off asset, it does beg the question of where gold stands relative to Bitcoin. The evidence so far doesn't lead me to believe gold is going anywhere, but my analysis could change if we see Bitcoin acting as a risk off asset in a sustained manner, rather than just for a few day streak. Notably, even during the few days we saw Bitcoin sucking in capital from stock and bond markets, it didn't seem to impact gold's price in a significant way. This is all still very early to be discussing, and the cart is definitely before the horse, but it is at least some evidence that there is a world in which Bitcoin and gold can co-exist without cannibalizing each other. If Bitcoin one day truly does become a risk off asset, what would be the factor that determines whether money would flow into either Bitcoin or gold? That, I don't know. ~West

Birthrates Languish in Record Lows, C.D.C. Reports (NYT)

Despite a modest 1% uptick in 2024, U.S. birthrates remain at record lows. The fertility rate sits at 1.6—well below the 2.1 replacement threshold—fueled by fewer women in their 20s having kids and a long-term decline since the 2007 recession. Teen pregnancies have dropped drastically, and delays in starting families haven't been offset by increases in older moms. Go figure. Turns out, you can’t build a baby boom on a foundation of debt, inflation, and an late-stage empire that only manufactures consent. ~Zack

That’s it for this week.

No silver linings. Just Signals.

Birthrates are falling. Debt is surging. The state’s bigger than ever.

But we’re not here to call the top or predict the collapse, we’re just here to notice the macro shifts most people ignore.

Because the riskiest assumption you can make is that the future will look like the past.

The world isn’t ending tomorrow. But it is changing—and fast.

The goal isn’t to panic. It’s to pay attention. To see clearly. And to act accordingly—while you still can.

Build optionality. Hedge against fragility. And never outsource your resilience.

Sic semper debitoribus
~ West & Zack

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