I made that up, but I’m pretty sure F-150’s are not for sale in the U.K., but now that the Trump administration announced a preliminary U.K. trade deal that will open access for American exports, the Brits can dream big. Importantly, the trade deal keeps 10% blanket tariffs on U.K. imports, leading some to speculate that this 10% “minimum” may be the best countries can do in negotiations with the U.S. meaning higher tariffs might be here to stay. Also in the U.K. rates were cut to 4.25%, while citing, you guessed it - “uncertainty”.
Stocks liked the news, sending the S&P up to 5,663. Yields rose partly on the rotation into risk on the trade news, but possibly also due to the fact that consumers surveyed by the NY Fed continue to push up their inflation expectations, now at 4.8%. The 2Y ended at 3.88% and the 10Y at 4.38%.
Leo XIV
But the real news of the day was the announcement of the first American Pope, Robert Francis Precost, a Villanova graduate. He has assumed the name of Leo XIV
The last Pope Leo, was a defender of Capitalism back in 1891. You probably don’t remember but back in September 2024, I introduced you to the last Pope Leo and his famous encyclical Rerum Novarum in this post.
Lessons In Capitalism From The Vatican
Capitalism has had many critics. The Vatican, however, might be one of its most thoughtful ones.
In 1891, Pope Leo XIII’s Rerum Novarum tackled the “worker question” head-on—before “inequality” was a talking point and before socialists had a PR team. He called out socialism for undermining private property rights which he viewed as fundamental human rights, but he also saw the dark side of unchecked capital: workers stripped of dignity, paid less than a living wage, treated as inputs on a spreadsheet. Sound familiar?
Rerum Novarum didn’t pick sides. It said both capital and labor were necessary, both had duties, and that the State should side with neither but protect the vulnerable. It wasn’t a call to redistribute wealth by force, but a call to justice. Work was a vocation, not just a transaction. Wages were to support life, not merely clear markets.
A century later, Centesimus Annus (JP2’s remix) reminded the post-Cold War crowd not to declare victory just because “real socialism” collapsed. Winning by default isn’t the same as being right. The encyclical warned that capitalism without virtue—or democracy without values—could become a “thinly disguised totalitarianism.” And that Totalitarianism itself is seen as opposing the Church because it denies the transcendent dignity of the human person and rejects objective criteria of good and evil. Totalitarianism flattens the person into a cog, denying their inherent dignity. That’s why Centesimus Annus sounds the alarm: a democracy without values is just totalitarianism with better branding. It’s not just about who owns the means of production—it’s about who owns the definition of “good.
The lesson? Markets and enterprise are good—but not gods. Freedom isn’t license. Work isn’t just a paycheck; it’s a path to purpose. Development must be more than GDP. Markets can be messy—but they leave space for initiative, dignity, and surprise. Totalitarianism doesn’t. It promises order, delivers despair, and grinds the person down to a tool. That’s why the Church, as the “safeguard of transcendence,” insists: man is not a means—even for record profits.
XTODs:
XTOD: "To attain knowledge add things every day. To attain wisdom subtract things every day." - Lao Tzu
XTOD: An unsettling investment fact: Stocks will have half-decade to full decade periods where they underperform cash by a significant margin. If you aren't mentally prepared for this, you may give up when such times arrive.
XTOD: This is not an SNL skit. Howard Lutnick: we feel really good about the deal….We started at 10% tariffs and ended at 10% and the market for America is better and this is a perfect example of why Donald Trump produced Liberation Day.
XTOD: So... the digital world has nearly eliminated friction (ChatGPT writes essays, Meta's AI plays your friend). The physical world drowns in it (Newark airport, infrastructure crumbles). And for those who can afford it, friction becomes an optional aesthetic choice (West Village living, curated experiences).
This is an economic system where frictionlessness is this weird commodity and understanding it is really important. Warren Buffett sees it too. He warned of maintenance coming due as he stepped down this past weekend. The simulation economy can't run without physical infrastructure (as many have said) but we've optimized for short-term ease over long-term resilience.
We've created three separate worlds operating on entirely different rules - and different levels of friction. link in next post, enjoy! https://t.co/ct5nYA05E3
https://x.com/GregoryMcKeown/status/1920584518219805175
https://x.com/dollarsanddata/status/1920457518540550574
https://x.com/RpsAgainstTrump/status/1920517953566482672
https://x.com/kylascan/status/1920491503253926060
No comments:
Post a Comment