As we close the books on 2025 and start eyeing 2026 like a slightly suspicious dinner guest, it’s hard not to get a little philosophical.
Not “burn sage and consult the stars” philosophical — more like the practical kind that sneaks up on you when familiar explanations stop working.
Markets are trading just fine. Governments, for better or worse (mostly worse) are still busy telling people what to do and how much they owe for the privilege of being told what to do. People are still doom-scrolling. A lot.
There’s a lingering assumption this year that the institutions we’ve been relying on day in and day out are thinner than they used to be. Less effective.
As we round out this year, what’s being repriced is more than the market task of assessing risk. Legitimacy. That’s what is under scrutiny right now.
Seen through a cyclical lens, that makes sense. The Fourth Turning, popularized by Howe and Strauss, is upon us. So are Dalio’s long and short debt cycles.
We watch the Fed meetings, minutes and press conferences with the same intrigue as always. But long cycle is telling us the short-term one doesn’t have the gumption that the markets once believed.
It’s actually amusing, if you think about it. We spend a lot of our lives believing there’s a narrative that ties this ol’ ball spinning free in space together in some coherent pattern.
Heh.
If we didn’t, we’d all be joining Randall McMurphy in the cuckoo’s nest.
And as we enter the second quarter of the first century of this new millennium, even the calendar seems to suggest that the “reset” everyone keeps promising is about to arrive… on schedule.
Yesterday’s Jobs Report and the Sound of Sand Shifting
Yesterday’s employment report is a good example of how this plays out in real time.
The Bureau of Labor Statistics estimates the U.S. economy added 64,000 jobs in November, after losing 105,000 in October. At first glance, not a panic number.
But October’s drop — the largest since late 2020 — was driven by a sharp contraction in federal employment as deferred resignations finally cleared the payrolls.
Zoom out a bit, and the picture softens further.
The three-month average sits near 22,000 jobs added, territory last visited during the 2001 recession. Headline unemployment ticked up to 4.6%. The broader U-6 measure climbed to 8.7%, its highest since 2021.
Investors are taking this print in stride. We’ve all learned — sometimes the hard way — that recent jobs reports have had a habit of looking stronger at first blush than they do after revisions.
Zoomers and the Shape of Anger
We have been intrigued by a Free Press account of Generation Z protests breaking out globally. “Desperate young people are driving world leaders from power,” writes Martin Gurri. “But the revolutionaries have no clue how to replace the old systems.”
Born into a world where digital life came first, and physical community came second, Zoomers often experience institutions as abstract, unresponsive, or hostile. Their politics look less like platforms and more like eruptions.
From Chile and Peru to Bangladesh, Madagascar, and now Bulgaria, youth-led protests have flared with remarkable speed.
They share common features: leaderless organization, sharp social-media tactics, fury at corruption — and very little agreement about what comes next.
Their symbols tell you a lot.
Millennials borrowed Guy Fawkes masks and dystopian scripts. Zoomers wave the pirate flag from the anime One Piece. The humor is intentional. It signals contempt for the old political language as much as for the people still speaking it.
When protests in Sofia forced Bulgaria’s prime minister to resign earlier this month, the striking detail wasn’t originality — it was geography. Europe, long buffered by tighter digital controls, has finally been breached.
There’s Howe and Strauss energy all over this story. Nothing about the Fourth Turning says consensus.
Argentina’s Long, Unflashy Experiment
Argentina offers a quieter contrast. We’ve been keeping one eye on the story from our men on the street on the other side of the world: Joel Bowman and Rob Marstrand.
Two years into Javier Milei’s presidency, the country is attempting something increasingly unfashionable: restoring credibility through restraint rather than grand promises. Milei’s rhetoric is theatrical, but the project itself is sober — undo decades of capital controls, subsidies, and monetary mismanagement.
Progress has been uneven. His decision to avoid a full peso float early on burned reserves and drew justified criticism. The currency regime has since crept closer to reality, though it still falls short of a clean break.
Argentina is not fixed. It remains far from reclaiming its early-20th-century prosperity. But it is at least trying to rebuild legitimacy by letting prices, incentives, and markets do their slow, unglamorous work.
In Dalio’s framework, this is an attempt to reset before the long debt cycle forces a harsher adjustment. It’s not heroic. But in Milei’s view, the fight is real and existential.
Revolution Then, Revolution Now
Revolution, of course, is hardly foreign to the American story.
Two hundred and fifty-two years ago this week, a group of colonists boarded three ships in Boston Harbor and dumped 342 chests of tea into the water. The target wasn’t the price of tea; it was the precedent set by the Tea Act of 1773, which granted the British East India Company a monopoly.
That tea was worth nearly $2 million in today’s dollars. Parliament responded with the Coercive Acts — closing Boston’s port, imposing military rule, and stripping colonists of legal protections.
Instead of restoring order, it unified resistance. The First Continental Congress soon followed.
That revolution had structure. It aimed to preserve liberties already earned through blood and hardship — property rights, representation, self-rule. The risks were clear. The goals were concrete.
Today’s unrest often looks different. It seeks rupture more than reform, rejection more than preservation. The anger is real. The organizational power is formidable. The destination remains foggy. As it likely will…
Where the Cycles Converge
We’ve been calling these narratives that exist outside the daily evidence of our lives metacycles.
The Fourth Turning is a great example. Gen Z’s world is very different from the Greatest Generation. But in a cyclical way, their experience is about to get real, and fundamentally similar. After everything gets torn down and burnt in a pile, you still gotta eat and find some shelter… heat and light are nice, too.
Whatever stress these young ‘uns think they’re feeling is going to bring confrontation and institutional reckoning. Yesterday, in A Tale of Three Americas, we looked at three competing narratives for the soul of America.
The long debt cycle constrains the old habit of borrowing our way out of trouble. Global debt (government, corporate, and household) surpassed $346 trillion in 2025, reaching approximately 310% of global GDP.
Global government debt by itself is a round and curly hair away from 100% global GDP.
In this environment, short-term debt cycles have already lost their potency. Debt itself is a function of trust.
Together, the long and short debt cycles are forcing a repricing of legitimacy — who can be trusted, who can’t. What’s missing is the why.
For investors, this matters. Assets tied to confidence — long-duration bonds, over-levered business models, narratives dependent on perpetual stability — carry more risk than their spreadsheets suggest.
Assets tied to adaptability, cash flow, and optionality tend to age better in environments where legitimacy is contested.
None of this guarantees disaster. But it does explain the unease many feel heading into 2026. The old stories persuade fewer people. The new ones aren’t finished yet.
In between lies volatility — financial, political, and cultural. Trump seems right at home pushing the chaos along…
Our job isn’t to pick a slogan or a side. It’s to recognize where legitimacy is being rebuilt, where it’s being faked, and where it’s quietly draining away.
Revolutions without plans tend to end in terror and sorrow. Systems without trust eventually seize up.
Cycles don’t care what we believe. They respond to balance. And balance, right now, is being renegotiated almost everywhere at once.
Like I said, it’s amusing if you choose to let it be.
~Addison
P.S. Tomorrow on Grey Swan Live!, Dan Amoss joins us to examine the AI boom the way he examines everything else — through financial statements, cash flows, and the uncomfortable details most investors would rather ignore.
We’ll explore where the accounting stress fractures are already forming inside today’s AI darlings, why Dan believes 2026 could prove more treacherous for individual investors than either 2000–01 or 2008–09, and what the trades he’s already placed during this boom suggest about what comes next.
This will not sound like cable television.
It will be dense. It may be unsettling. And it will be coherent — precisely the kind of conversation Grey Swan Live! was built to host.
Dan Amoss is a forensic accountant by training and a market bloodhound by temperament. He was early to the tech wreck, earlier still to the decay inside mortgage-backed securities, and famously short Lehman Brothers when that trade paid off 470% overnight on September 15, 2008.
For the past decade, Dan has quietly traded stocks and options alongside another name you may recognize: Jim Rickards.
