Daily Economic Update: May 21, 2025

Not 7

The S&P 500 index’s 6-day winning streak ended yesterday, with the index closing at 5,940.  The recent 6-day winning streak was better than any of the current winning streaks in the MLB (the Reds are currently at 5 at the time of this writing). There were no major catalysts on the day as investors await further tariff or tax news.  The latest news on the tax bill front was that there remain about a dozen GOP holdouts.

Playing Hard To Get With Key Levels

Bond yields remain largely range bound: with the 2Y Treasury yield flirting with 4%, the 10Y Treasury yield flirting with 4.50%, and the 30Y Treasury yield flirting with 5%. It’s like investors are dancing with levels, the 2Y loves 4% unless something comes along to have them reassess the Fed’s path.  The 10Y loves 4.5% unless they fear growth or inflation. And the 30Y loves 5% as they weigh the U.S. deficits and geopolitics.

There was Fedspeak yesterday, but I didn’t listen to it.  Though one central bank did act and that was the RBA which cut rates 25bps to 3.85%, one of the drivers of the cut was, you guessed it, trade uncertainty.

We’ll have another light data day today, with the 20Y Bond auction as the highlight.

On a light news day, I’m going to keep this short and try not to contribute to the noise. 

Speaking of Words

One thing I did find interesting was financial writer Kyla Scanlon, of “vibecession” fame, posted on X recently about how she was “Reading CS Lewis again and banging my head into the wall because of the continuous realization that it always the same problems just a different time in history.”  and posted an image with an excerpt from Lewis’ Screwtape Letters, referring to the following passage:

“Once they know that some changes were for the better and others were for the worse, and others again indifferent. We have largely removed this knowledge. For the description of ‘unchanged’ we have substituted the emotional adjective ‘stagnant’. We have trained them to think of the Future as a promised land which favored heroes attain - not as something which everyone reaches at the rate of sixty minutes an hour, whatever he does, whoever he is.”  - Screwtape

If you’re unfamiliar with the Screwtape Letters, google it, but it’s written as a series of letters from a senior devil to a junior devil regarding the best ways to keep humans from virtue.

In my opinion the central idea underlying Kyla’s X post was that human nature never changes.

But Here’s The Cool Thing

I smiled because I beat her to the punch last year, referencing Screwtape on the topic of noise.  .  In fact in March 2024, I referenced this from The Screwtape Letters and one of my favorite quotes on “noise”, also from The Screwtape Letters here (and as follows):

"Noise, the grand dynamism, the audible expression of all that is exultant, ruthless and virile.... We will make the whole universe a noise in the end. We have already made great strides in this direction as regards the Earth.  The melodies and silences of Heaven will be shouted down in the end."

But The Point Really Is This

The point really is that I read the “About” section on Kyla’s Substack and (1) I should probably switch to substack (2) I should probably write a book and (3) while..”The goal of my newsletter is for it to *always* be free - but there is work that goes into writing, of course! If you think the content is valuable or would like to buy me a coffee once a month :-) I would sincerely appreciate your support.”

Do you think I could charge you $10/mo.  for this blog?  If so, feel free to let me know in the comments or better yet Venmo me.

I’ll hold my breath.

XTOD’s:

XTOD: Google introduces real time translation for video calls

XTOD: The Google demos today are insane. Somewhat ironic given the origin of OpenAI being "we shouldn't let Google dominate AI", but right now, Google has the global lead in every price point and every latency for LLMs, and for image gen, and video. Plus they own the complements

XTOD: Every day for the next 10 days is a palindromic date (the same number backwards):

5/20/25   5/21/25  5/22/25   5/23/25  5/24/25 5/25/25 5/26/25 5/27/25 5/28/25 5/29/25

XTOD: Cash-strapped Harvard joins with Franklin Templeton, to sell its (troubled) Private Equity and Private Credit assets to retail investors..... Like we said.....

XTOD: "Like Warren, I had a considerable passion to get rich, not because I wanted Ferraris—I wanted the independence. I desperately wanted it."   — Charlie Munger

XTOD: 1. Find an activity you love to do. 2. Build a business around that. 3. Never stop.

https://x.com/0xgaut/status/1924895003593089457

https://x.com/todayyearsoldig/status/1924912266228728091

https://x.com/rcwhalen/status/1924794462141648969

https://x.com/InvestingCanons/status/1924624613641683366

https://x.com/FoundersPodcast/status/1924857378454851936