Pendulum Politics: Europe, the U.S., and China — The Great Hybridization

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This week’s macro opera was outrageous for all the right reasons.

First came the government’s data necromancers, finally dragging out the backlog: delayed jobs, inflation, GDP—official permission to declare October a tree ring and move on. Markets flipped from ice‑cold paralysis to manic recalibration in seconds, upgrading blind guesses to something only marginally less blind, and delivered a casual 3% pullback.

On the geopolitical stage, President Trump rolled out the presidential red carpet for Mohammed bin Salman and floated a package that blends F‑35s, civil nuclear cooperation, energy deals, and oil diplomacy. It is either shrewd realpolitik with a critical swing producer or a deliberate shrug at liberal‑democracy pretensions, but either way it reminds everyone where the marginal barrel—and a good chunk of future volatility—actually live.

Meanwhile, the Fed’s drama carried on in the background like bad ambient noise. Bond yields swung, the VIX pushed through the low‑20s, and the market quietly marked down the odds of a December cut. Risk assets on the periphery—crypto, commodities, anything that needs abundant liquidity—felt the squeeze first, a kind of portfolio‑level peripheral vasoconstriction.

Nvidia was supposed to be the designated hero: AI‑fueled numbers, innovation swagger, and a growth story strong enough to tempt burned‑out bulls back into the fire. For a moment it worked—futures up, sentiment thawing, a brief fantasy that tech exceptionalism could substitute for policy competence.

Then came the September jobs print, as preserved as a 1960s Twinkie. Payrolls doubled expectations, ammunition for the “no cut needed” camp, while rising unemployment and downward revisions handed the doves their own talking points. The Fed remains stuck in the middle: not tight enough to crush inflation to 2%, not loose enough to lift both prongs of the K‑shaped economy. The top slice muddles through; the middle and bottom grind. The market read that as no vision, no leadership, and expressed its view by erasing early gains and extending a collective middle finger.

Call it chaos, call it catharsis: in one week, the data came back from the dead, Washington doubled down on Saudi power, the Fed lost the thread, and Silicon Valley’s chosen champion couldn’t fully save the tape. The cycles are colliding, the cast is set, and the Fourth Turning energy is still just in the opening act.”

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