Why is this blog One Big Beautiful Blog? Well the plan for this blog was to write "the definitive guide to financial history”, note the lowercase, a deliberate choice used to de-emphasize the importance of everything written in this blog and to make a perhaps not so subtle jab at the often-inflated importance of financial news – after all, the irony of writing a daily update while believing it’s best to ignore the noise is not lost on this author.
Forecasting is famously elusive, wrong, and usually useless, which is why this blog trades predictions for perspective. It swims in a different ocean, embracing uncertainty with humility and filtering noise through wit, history, and occasional sarcasm. Add in a curated feed of XTODs, and you’ve got an intellectually humble, weirdly useful companion for navigating the madness.
Criminally underrated? Whatever your opinion, it is undeniably beautiful in its blend of insight, wit, and acknowledgement that sometimes, trees just don't grow to the sky....at least that's what AI tells me.
One Big Beautiful Bill
The Trump Administration’s tax bill made it through the House yesterday, but questions remain over what changes the Senate may ask for before this bill ultimately passes. It could get SALT(y) but let's face it there are no plans to truly tackle the big issues that drive the deficit.
Concerns over deficits and bond supply continues the narrative that has led to higher yields. The 2Y Treasury yield continues its love affair with 4%, while the 10Y breached 4.60% before being rebuked and closed around 4.54%. The S&P closed at a loss for the second day in a row, the index now is at 5,842.
One Big Forgotten Thing This Week - The Data
A week filled with little data finally got some yesterday. The S&P PMI’s came in better than expected. The market was expecting a drop in manufacturing and didn’t get one. Services continued to hang in there and there were no major signs in jobless claim data that the labor market is rolling over.
But one area where data might be looking “problematic” is housing where home sales fell.
Recessions To Solve Housing Problems - Right?
That’s the message a friend found on a real estate broker’s flyer he received in the mail. The flyer read “Is A recession Bad?”, with a subtitle, “A Recession Means Falling Mortgage Rates” and these lower rates will make “your property more affordable to more buyers”.
You see when people lose their jobs in a recession they definitely are willing to buy your house for more than they can today when they have a job. Makes sense. And those lower rates definitely mean that unemployed people can get approved for mortgages. I’d venture to guess that realtors didn’t do super well in the 2009 and 2010 recession, but sure let’s root for a recession.
Look I get it, a 7 handle mortgage rate isn’t helping, but if you want lower rates you want them to come from a few non-recessionary drivers like: reduced term risk premiums, lower volatility, lower inflation premium and tight primary-secondary spreads.
SIFMA Early Close
Since you’ll have free time on your hands heading into the holiday weekend, you should go ahead and read this blog from the start of the year. After all, it is “the definitive guide to financial market history.”
XTOD’s:
XTOD: We have a new report out: "Drawdowns and Recoveries: Base Rates for Bottoms and Bounces" -Our investigation of price declines from peak to trough, or drawdowns, for stocks and mutual funds yields some provocative and surprising results.
-We examine overall base rates, point out the persistence of drawdowns even in a world with perfect foresight into long-term returns, provide two case studies, review academic research, and offer qualitative guidelines for considering which stocks may recover.
-The median drawdown for the 6,500 stocks in our sample from 1985-2024 was 85 percent and took 2.5 years from peak to trough. More than one-half of all stocks never recover to their prior highs.
-The best stocks and investors suffer through large drawdowns, which can be considered a cost of doing business over the long haul. https://t.co/OsALSWSdkw
XTOD: Algorithm of Narcissus by @emikusano In Kusano’s work, the myth of Narcissus is reinterpreted through AI. Where algorithms no longer just reflect, but shape who we think we are. Her self-portrait becomes a critique of surveillance capitalism and algorithmic identity.
Eternal Opposition is a growing record of this shift: from machine vision to machine mirroring, from observation to co-authorship. Kusano’s work captures that threshold with precision. https://x.com/i/status/1925619033585467738
XTOD: Just refinance they said https://pbs.twimg.com/media/GrjwtUAWYAAZO6s?format=png&name=small
XTOD: We have been. I now count 8 narrative rotations in bond markets since late 2022. Recession… no landing … soft landing … no landing … recession … no landing … recession … etc. Flips every 4-5 months or so. Narrative volatility is here to stay in today’s Bifurcation Nation.
XTOD: You must let go of your need for comfort and security. Creative endeavors are by their nature uncertain. You may know your task, but you are never exactly sure where your efforts will lead. If you need everything in your life to be simple and safe, this open-ended nature of the task will fill you with anxiety. If you are worried about what others might think and about how your position in the group might be jeopardized, then you will never really create anything. You will unconsciously tether your mind to certain conventions, and your ideas will grow stale and flat.
XTOD: Your first task is to find what feels effortless to you. Your second task is to put maximum effort into it.
https://x.com/mjmauboussin/status/1925644665606316250
https://x.com/antagonist4ever/status/1925619033585467738
https://x.com/awealthofcs/status/1925554107739168942
https://x.com/MichaelKantro/status/1925503521752842402
https://x.com/RobertGreene/status/1925235146481180979
https://x.com/JamesClear/status/1925643333763764383
No comments:
Post a Comment