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A daily analysis of macroeconomics, bitcoin, geopolitics and big picture power shifts, hosted by Nathaniel Whittemore @nlw.
7 hours ago
Why the First US Crypto Bank Is a Big Deal
On this edition of The Breakdown weekly recap, NLW looks at: * DEXetition – Uniswap’s battle with SushiSwap heats up as the former dropped the UNI governance token in what some likened to a crypto stimulus check * The Fed has no clothes – After another FOMC meeting of “nothing new,” the mirage of Federal Reserve omnipotence is fading * TikTok and WeChat banned from U.S. app stores – Is it just a negotiating technique? Whatever the case, people are not happy * Kraken becomes a bank – What it means now that Kraken has been approved for a Wyoming Special Purpose Depository Institution charter
1 day ago
‘I Didn’t Buy It to Sell It. Ever.’ MicroStrategy’s Michael Saylor on His $425 Million Bitcoin Bet
MicroStrategy made waves when it announced in early August it was moving $500,000,000 in treasury reserves out of cash. At least $250 million were to be moved into bitcoin. Earlier this week, the company announced its final bitcoin purchases totaled $425 million. In this conversation with NLW, MicroStrategy CEO Michael Saylor explains: * Why he’s always treated the company with a long time horizon * Why the asset inflation rate is the real inflation rate * How he became convinced that bitcoin is the best treasury asset in the world * Why Michael believes some other companies will follow suit, but better do so quick * Why the intensity of maximalists is actually part of the reason he grew conviction around the asset * Why he would buy every bitcoin if he could
1 hr 21 min
2 days ago
Raoul Pal: Monetary Policy Is Finished and Macro Debates Are Boring
Raoul Pal is CEO and co-founder of Real Vision, a platform fundamentally disrupting macroeconomics and financial media. In this wide-ranging conversation, he and NLW discuss: * Hot takes on the most recent Jerome Powell/Federal Reserve press conference * Why central banks can’t do anything more until they merge with treasury departments * Why stablecoins are disrupting how we think about global reserve assets * Why traditional financial media missed an entire generation of investors * Why all macro debates are boring
2 days ago
Governments vs. Networks: The Battle for the Soul of Finance
Today on the Brief: * Kraken is the first crypto exchange to become a U.S. bank * FTC preparing antitrust lawsuit against Facebook * Gold-standard fan Judy Shelton doesn’t have the votes to be confirmed as Federal Reserve governor Our main discussion: The battle for the soul of finance. In this episode, NLW looks at the power competition between governments on the one hand and the decentralized network-driven finance alternatives that would reshape that power. Interestingly, in this competition corporations may play a role that benefits both sides at different times and in different ways.
4 days ago
The Decade of the Living Dead: How Zombie Companies Are Robbing Tomorrow’s Economy
Today on the Brief: * MicroStrategy increases its bitcoin reserves by $175 million * The Oracle-TikTok deal starts to smell fishy * The SEC is investigating claims of fraud involving Nikola Corp. Our main discussion: The rise of zombie firms. A zombie firm is a company that can’t afford to service its debt from operating income. These companies are made possible by artificially low interest rates, and they drain resources from the economy. On today’s episode, NLW explains: * Why there are more zombie companies than ever * The negative impact they have on the economy * How they could drive a new financial crisis
5 days ago
The Business of Geopolitical Competition
Today on the Brief: * Crypto exchange volume sees highest month-over-month increase since February 2018 * Uniswap overtakes SushiSwap in total value locked * What Coinbase vs. Apple means for the future of decentralized applications Our main discussion: NLW looks at the business of geopolitical competition, including: * TikTok, Oracle and the new politics of deal making in the “new Cold War” * “Mulan” controversy around Uyghurs and Hong Kong police support * The real motivation for China’s digital currency
6 days ago
Is Being the ‘Saudi Arabia of Money’ Good for America?
On this week’s Long Reads Sunday, NLW looks at recent statistics suggesting that, based on a comprehensive set of measures of well-being, U.S. citizens are worse off than they were a decade ago. One potential explanation is the U.S.’ “USD Dutch Disease” - a peculiar set of consequences resulting from the role of the U.S. dollar in the world. This week’s reading is “How to Diagnose Your Own Dutch Disease” from the Financial Times.
Sep 12, 2020
The Raw, Savage Capitalism of Open-Source Competition
On this edition of the Breakdown Weekly Recap, NLW looks at: * The “holding pattern economy” – why stocks, jobs and central bank policy seem stuck in place * Why Joe Biden’s China plan shows that, no matter who wins the presidential election, U.S. economic policy towards China is likely to get more aggressive * The surveillance state gets stronger as Amazon appoints a former NSA head to its board of directors * The SUSHI saga and why there’s no capitalism more savage than the competition in open source networks
Sep 11, 2020
‘As Toppy as It Gets’: Metals, Bitcoin and Fiat’s Race to the Bottom, Feat. Tavi Costa
Tavi Costa is a portfolio manager at Crescat Capital. In this conversation with NLW, he discusses: * The credit exhaustion moment in the engines of global growth * The race to the bottom for fiat currencies * The explosive moment for precious metals * Where bitcoin might fit in this larger framework Find our guest online: Twitter: @TaviCosta Instagram: @TaviCostaMacro Website: https://www.crescat.net
Sep 10, 2020
How Monetary Policy Undermined American Resilience
Today on the Brief: * Jobless claims slightly exceed expectations at 884,000 * ECB keeps policy unchained; euro rises versus dollar * Survey: What’s the right way to understand the business and market cycle in the U.S. today? Our main discussion: interest rates and the undermining of American resilience. In this discussion, NLW looks at a number of artifacts of the low interest rate world, including: * Increasing cost of child care * Declining share of total net worth held by bottom 50% * New startups using lottery tactics to incentivize savers
Sep 9, 2020
‘Absolute Raging Mania’: Famed Investor Druckenmiller Thinks 10% Inflation Is Possible
Today on the Brief: * Markets recover slightly but vaccine trade falters as AstraZeneca pauses trials * Bitcoin and gold correlation increases sharply around dollar instability * Mastercard launches simulation tools to help develop central bank digital currencies Our main discussion: Stan Druckenmiller speaks! NLW breaks down the famed investor’s interview with CNBC today, including: * The merging of the Fed and the Treasury * Mania in financial assets * A growing fear of future inflation * Why the next three to five years are going to be extremely difficult
Sep 8, 2020
Why Bitcoin Investors Aren’t Worried About This Price Pullback
Today on the Brief: * Stock market continues its descent * Insider stock selling reached five-year high in August * President Trump promises more aggressive decoupling from China Our main discussion: Investors and the BTC price dip. Over the last several weeks, bitcoin has pulled back from $12,400 to around $10,000. This dip has happened alongside a broader retracement in equities, led by falling tech stocks. While some have levied correlation to equities as a failure of bitcoin, NLW argues this critique misunderstands the narrative that has driven accumulation from new holders over the last six months.
Sep 7, 2020
Sorry, Uncle Sam, We’re Entering the Era of Private Money
On this special Labor Day edition of The Breakdown, NLW is doing a reading of Nic Carter’s most recent essay “The Crypto-Dollar Surge and the American Opportunity.” In it, Carter argues that rather than fight the tide, the U.S. government should accept and take advantage of its unique position in the emerging world of global crypto monies.
Sep 6, 2020
A Practical Utopian’s Guide to the Coming Collapse
Earlier this week, news broke that David Graeber, author of influential works such as “Debt: The First 5000 Years,” had passed away. In his memory, today’s Long Reads Sunday is a reading of his 2013 piece “A Practical Utopian’s Guide to the Coming Collapse.” In it, he argues the impact of the revolutionary period of the 1960s was much more profound than popular opinion has it, and that the age of revolution is far from complete.
Sep 5, 2020
Is Tesla a Stock for Suckers?
On this episode of The Breakdown Weekly Recap, NLW looks at the full story the stock markets are telling us about the economy, including: * SoftBank unmasked as the “Nasdaq whale” playing the same options game with stocks as r/WallStreetBets * The Tesla stock split game: Does this just mean it’s for n00bs and rubes? * The VIX shows November nervousness * Can you hear it? As stocks slide, the money printer is revving again
Sep 4, 2020
8 Historical Analogies That Help Explain the Madness of 2020
Inspired by Michael Batnik’s “All Wrapped In One,” this episode examines eight moments from history that can help us make sense of one of the most chaotic years of our lives. * Income inequality of the Gilded Age * The election of 1896 * The pandemic of 1918 * The economy of 1929 * The social movements of the 1960s * The stock market of 1987 * The speculation of 1999 * The housing market of 2006
Sep 3, 2020
DeFi Degens Are Crypto’s Suicide Squad
Today on the Brief: * Traditional markets falter, led down by tech stocks * Bitcoin falls under $11,000 for the first time since July * Stablecoins mint $100m daily since mid-July Our main discussion is about DeFi’s “degens.” NLW talks about: * The numbers behind DeFi’s recent run up * What “degen” means in this context * Why degen is in part a reaction to previous bitcoiner critiques of Ethereum * Why degen is (in even bigger part) a reaction to a no-yield, artificially low interest world
Sep 2, 2020
Let Them Eat Equities! The Economic Chickens Come Home to Roost, Feat. Luke Gromen
Today on the Brief: * Debt will exceed U.S. GDP for the first time since 1946 * SPACs in action! * Decentralized exchange volume flippens centralized exchanges Our main conversation is with Luke Gromen, founder of the Forest for the Trees consulting firm. In this conversation, we discuss: * Chairman Powell’s speech and whether this is a true policy departure * The evolving relationship between the Federal Reserve and Treasury Department * What it would mean to get China to start “footing the bill” * The gold narrative * Why stock price gains are unlikely to keep U.S. citizens satisfied with the economy for long Find our guest online: Website: fftt-llc.com Twitter: @LukeGromen
Sep 1, 2020
Financial Postmodernism and the Great Inflation Debate
August has come to a close. In this recap and “best of” episode, NLW looks at the big themes that defined the month. Most notable was the discussion of inflation culminating in the Federal Reserve’s newly announced policy of average inflation targeting. This episode featured commentary from: * Tony Greer - Author, Morning Navigator * Keith McCullough - CEO, Hedgeye * Chris McCann - General Partner, Race Capital * Adam Tooze - Chair of History, Columbia University * George Selgin - Director at the Cato Institute Center for Monetary and Financial Alternatives * Hugh Hendry - Legend
Aug 31, 2020
US Stock Market Cap to GDP Reaches 190%, Eclipsing Dotcom Bubble High
Today’s episode of The Breakdown looks at the stories the stock market is trying to tell, including: * New all time high in total market capitalization to GDP ratio (higher than dotcom bubble) * “No precedent for how high” valuations can go * Fed denies asset bubble; intimates it wouldn’t care about asset bubbles if full unemployment comes with it * Bezos at $200,000,000,000 * Percentage of stocks traded by individuals reaches all time high of 20% * Robinhood leads in FTX complaints * Buffett’s Japan trading firm bet
Aug 30, 2020
The Case for $500,000 Bitcoin
This week’s episode of Long Reads Sunday is a reading of the latest essay from Tyler and Cameron Winklevoss. The essay looks systematically at the problems of the slate of current store-of-value assets, including the U.S. dollar, oil and gold. The brothers argue why those assets have, or are starting to have, value in their safe haven function, while bitcoin is on the rise.
Aug 29, 2020
The End of an Era? Why Bitcoin and MMT Won the Week
On The Breakdown’s Weekly Recap, NLW looks at the shifting sands of the global economy. He says Federal Reserve Chair Jerome Powell’s speech at Jackson Hole this week was an argument that an era that began in the 1970s is now closing. At the same time, he argues Powell did very little to provide a vision for what comes next. Instead, it is the alternative economic philosophies – Modern Monetary Theory on the one side, bitcoin on the other – that are attracting people for a different vision of the future.
Aug 28, 2020
The Anxiety Index: 4 Fear Factors Shaping the Economy
Today on the Brief: * Skepticism around Powell’s inflation prognostications * The Tesla Stock Split Game * China’s COVID-19 vaccine maker presses countries for early adoption Our main discussion: The Anxiety Index We live in an economy organized around consumption and perpetual growth. In that context, factors that cause consumers to be fearful, reduce spending, increase savings, move less and generally slow down can wreak havoc. In this episode, NLW discusses four factors shaping and driving consumer anxiety, including: * COVID-19 related concerns, both health and economic * Monetary policy questions * U.S.-China tensions * Election insecurity
Aug 27, 2020
Everything You Need to Know About Jerome Powell's Jackson Hole Speech
Federal Reserve Chair Jerome Powell spoke Thursday at the annual Jackson Hole conference convened by the Kansas City Fed, which was virtual this year due to COVID-19. In the highly anticipated speech, Powell laid out a number of key changes to how the Fed approaches unemployment and inflation. In this recap, NLW looks at how people reacted to the speech. On the one hand, there is disagreement between those who anticipate out of control inflation and those who think the Fed’s track record on achieving even modest inflation is abysmal. On the other, almost everyone seems to think the Fed appears run down, out of tools and increasingly looking to support from Congress.
Aug 26, 2020
The Battle to Get A Dictator’s Seized Millions to 62,000 Venezuelan Health Care Workers
Today on the Brief * The SEC changes accredited investor rules * Fintech and crypto investor Ribbit Capital starts $350 million SPAC * Previewing Federal Reserve Chair Jerome Powell’s Jackson Hole speech Our main conversation is with Ruben Galindo, CEO and co-founder of Airtm. Airtm is a global dollar account that lets users anywhere access U.S. dollars, powered by cryptocurrency infrastructure and a P2P network. The company is currently working with Juan Guaido’s opposition government in Venezeula to attempt to distribute $18 million in funds the U.S. seized from the Maduro dictatorship. In this conversation, he and NLW discuss: * How Airtm works outside of the traditional banking system * Why people around the world are hungry for access to dollars * What the Health Heroes campaign is trying to achieve * How Guaido and Airtm are trying to work around the Maduro government’s attempt to suppress them Find our guest online: Website: airtm.com Twitter: @theairt…
Aug 25, 2020
An Unintended Consequence of Low Interest Rates? The Big Get Bigger
Today’s episode of The Breakdown is an extended edition of the Brief. NLW discusses: * The “COVID-19 vaccine trade” on Wall Street kicks markets higher * The latest on TikTok vs. the U.S. and what it means for the U.S.-China relationship * More companies move reserves from cash to bitcoin The final topic today looks at news that some large money market funds are shifting fees from users and taking the financial hit themselves. This creates a dynamic where only the largest companies can survive long term, and reflects a key unintended consequence of low interest rates.
Aug 24, 2020
How Much Should We Fear Post-Crisis Debt or Inflation? Feat. Adam Tooze
Our guest today is Adam Tooze. Adam holds the Shelby Cullom Davis Chair of History at Columbia University and serves as director of its European Institute. He is known for his books “The Deluge: The Great War, America and the Remaking of the Global Order” and “Crashed: How a Decade of Financial Crises Changed the World.” In this conversation, he and NLW discuss: * Historical analogies for our present moment * Federal Reserve policy and independence * How much we should fear debt and inflation post-coronavirus * How the economic and political crisis of 2020 has changed or reinforced the trajectory of the U.S., China and Europe * Why there is no such thing as the post-American era Find our guest online: Website: Adamtooze.com Twitter: @adam_tooze
Aug 23, 2020
Why Are Traditional Investors So Hungry for Yield Curve Control?
On today’s edition of The Breakdown’s Long Reads Sunday, our selections have to do with one of the hottest topics in central banking: yield curve control. “What Is Yield Curve Control?” The first piece is from the St. Louis Federal Reserve and is a primer on YCC, including past U.S. implementations as well as versions from Japan and Australia. “Market Jitters Show How Much Fed Medicine Matters” Our second piece is an op-ed about how dramatically markets reacted to this small detail from the Federal Open Market Committee minutes, and what it suggests for their desires involving YCC.
Aug 22, 2020
People Aren’t Buying the ‘Great American Recovery’ Narrative
Today on The Breakdown’s Weekly Recap: * People aren’t buying “the Great American Recovery” * Let’s stop considering the economy as one thing * Dave Portnoy doesn’t care about your principles * DeFi is the Wild West and saved only by the fact that no normie understands what the hell is going on * Bitcoin is being compared to the dollar not stocks and that’s serious progress
Aug 21, 2020
Winter Is Coming: Examining the Economy's Eight-Body Problem
The “three-body problem” is a physics issue that deals with unpredictable futures. In a recent essay, John Mauldin argues the economy is actually experiencing an “eight-body problem.” On today’s episode, NLW explores each of those dimensions shaping the challenge we face, including: * Central bank intervention * The destruction of the service industry * The implosion of global trade In the end, he argues that in a world ruled by chaos, fighting to control the narrative might be the only rational move. Read Ben Hunt’s essay “The Three-Body Problem”
Aug 20, 2020
The Most Pro-Bitcoin Politicians in the US
Today on the Brief: * Markets react to FOMC notes * Taiwan blocks China streaming services * Initial jobless claims back on the rise Our main discussion is a look at the politicians on both sides of the aisle who are pro-digital currencies and, especially, pro-bitcoin. Featuring: * Rep. Thomas Massie * Governor Jared Polis * Andrew Yang * Rep. Ted Budd * Rep. Trey Hollingsworth * Rep. Darren Soto * Rep. Stacey Plaskett * Rep. Tom Emmer * Senate Candidate Cynthia Lummis * Rep. Warren Davidson * Rep. Patrick McHenry
Aug 19, 2020
S&P 5 vs. S&P 500: The Real Story of the Stock Market Recovery
Today, NLW debuts a new format: “10 Takes in 10(ish) Minutes.” In this analysis, he looks at 10 takes surrounding the S&P 500’s return to positive territory on the year, including: * Great American comeback * Market disconnect and widening inequality * Don’t fight the Fed * To the Stoolies go the spoils * Stock splits and SPACs * It’s Tech vs. everything else * Cantillon insiders FTW * A new era of global liquidity? * You’d have done better with gold * You’d have done a lot a lot better with bitcoin
Aug 18, 2020
How Excess Capital and Low Interest Rates Reshaped Silicon Valley, Feat. Chris McCann
Today on the Brief: * Everyone turns bullish as S&P 500 nears all-time highs * Emerging market currencies are floundering * Bitcoin holding sentiment highest in two years Our main conversation features Race Capital’s Chris McCann. Chris was previously the founder of Startup Digest, building it to 1 million subscriptions long before email newsletters were a thing. He spent four years building the community program at Greylock before launching his own venture firm. In this conversation, Chris and NLW discuss: * The relationship between monetary policy and startup finance * What changes in startup financing have followed COVID-19 * What the emerging fintech stack looks like, outside of crypto Find our guest online: Website: Race Capital Twitter: @mccannatron
Aug 17, 2020
What’s Actually Happening with Inflation Right Now
There is perhaps nothing more important or contentious in macroeconomics right now than the question of inflation. On the one hand, there is a growing concern that rapidly growing money supply and increasing central bank balance sheets will inevitably lead to inflationary pressures. On the other, critics of that point of view point to significant counterveiling forces such as the 10% unemployment rate and growing savings rate among consumers. So who is right? * What are the specific narratives trying to say? * What is the evidence and data actually telling us? * And how are real people experiencing inflation today?
Aug 16, 2020
Is Asteroid Mining Really Our Best Argument for Bitcoin Over Gold?
Earlier this week, the Winklevoss brothers introduced Barstool Sports founder Dave Portnoy to bitcoin. One of the notable parts of the recap video was a discussion of how Elon Musk was set to destroy the value of gold on Earth by mining gold from asteroids. While much meme fun was had, on this week’s Long Reads Sunday NLW has chosen a selection that looks at how fiat beat out gold and how gold beat out silver to provide some – ahem – more immediately relevant lessons on how to explain the benefits of bitcoin. Read: Projection and Throwness Part III — Bitcoin’s 10x Advantage Over Gold Might Not Lie Where You Think By David Lawant
Aug 15, 2020
Here Comes the Most Bizarre Bull Market Yet
On this edition of The Breakdown’s Weekly Recap, NLW looks at the strange melange of realities interacting in the new emerging bull market. On the one hand, bitcoin has found narrative relevance and technical importance in a world of social unrest and increased state involvement in economies and citizens’ lives. On the other, insane financial engineering experiments are seeing three-quarters of a billion dollars in value locked up within hours before a bug sees it all go away. In the middle, agents of chaos like new bitcoiner (and LINK-holder) Dave Portnoy. This is going to get weirder before it gets more normal.
Aug 14, 2020
Fortnite vs. Apple/Google is the Internet's First ‘World War’
Today on the Brief: * Jobless claims down and retail sales up * The U.S. Federal Reserve is running distributed ledger technology experiments * The end of an era, as BitMEX begins KYC Our main discussion: the big battle brewing between Epic Games and Apple/Google. NLW looks at: * Why Fortnite got kicked off the Apple and Google app stores * Why Epic Games is suing in response * Why this was all very clearly planned by Epic Games * Why Apple and Google should be nervous about anti-trust * Why this is about a much bigger future than just a single game
Aug 13, 2020
Preston Pysh on Why We’ve Entered a Fundamentally New Era of Bitcoin Accumulation
The Investor’s Podcast Network cofounder Preston Pysh last recorded with The Breakdown on Black Thursday in March. As NLW and Pysh discussed the potential of future currency crises, bitcoin smashed all the way below $4,000. In the five months since, bitcoin has risen 200%. It has attracted the devotion of leading hedge funders such as Paul Tudor Jones II and more recently has become the reserve asset of choice of at least one publicly listed company. In this conversation, Preston and NLW discuss: * The significance of halving coinciding with central bank printing * The inevitability of negative interest rates * Why it’s the dollar, not the stock market, that is inversely correlated with the price of bitcoin * Why Preston believes in the stock-to-flow model * Who pays the price for inevitable currency debasement * Why we’re dramatically underestimating the precedent set by MicroStrategy’s $250,000,000 cash-for-bitcoin reserve switch * Why MicroStrategy will be w…
1 hr 43 min
Aug 12, 2020
#SupplyGate and the Battle to Frame Crypto’s Next Bull Run
Today on the Brief: * WSJ study finds TikTok was tracking data in a way that broke Android rules * The latest Core Inflation statistics * MicroStrategy stocks pops 10% after cash to bitcoin announcement Our main discussion: What’s the Ethereum #SupplyGate really about NLW breaks down: * The historical narratives bitcoiners and ether advocates hold relative to one another * The history of dominant narratives in crypto over the last three years * Why the next bull market is poised for a twin narrative combining bitcoin as a hedge against fiat debasement and DeFi as a money-making sandbox * What happened with #SupplyGate * Why #SupplyGate is as much about narrative competition as it is about the supply of ether
Aug 11, 2020
Joe Rogan for Fed Chair! Feat. Hugh Hendry
Today on the Brief: * A public company has switched $250 million in cash reserves to bitcoin * The latest in the vaccine rumor trade with Vladimir Putin’s propaganda play * Hong Kongers use the stock market to protest Our main conversation is with former hedge fund manager Hugh Hendry. After a few years of focusing on a “volatility at the end of the world trade” in property development in St. Barth’s, the constant contrarian Hugh Hendry has returned to the macro world in a big way. In this conversation, Hugh and NLW discuss: * Why Hugh left macro, and why he came back * How he lost three years being angry at the Fed * How he came to be bullish on equities in 2012 * How money managers become trapped by narratives * Why the Fed should actually be less, not more, conservative * Why we need someone like Joe Rogan as Fed chair Find out guest online: Website: hughhendryofficial.com Twitter: @hendry_hugh
1 hr 9 min
Aug 10, 2020
The Latest on the Global Economy’s Most Contentious Relationship
Today on the Brief: * Grayscale launches national digital asset TV ad campaign * Rough times for oil as Saudi Aramco sees 73% decline in revenue * Kodak crashes as government grant paused amid allegations of impropriety Our main conversation is a look at the latest skirmishes between the United States and China, including: * U.S. sanctions on Hong Kong leaders including Carrie Lam * Retaliatory Chinese sanctions on U.S. politicians * The arrest of a pro-democracy Hong Kong media tycoon * Arrest warrants issued for six foreign Hong Kong democracy advocates * President Trump signs executive orders targeting TikTok and WeChat * Twitter enters the race to buy TikTok before the Executive Order ban takes effect * Impact on banks, the Hong Kong stock market and Huawei
Aug 9, 2020
How the Purpose of the Stock Market Has Changed
On this week’s Long Reads Sunday, NLW reads three pieces: Public Markets Don’t Matter Like They Used To - Matt Levine in Bloomberg A look at how public markets are less and less about accessing new capital and more about narrative and liquidity for early investors. Two Reasons Crypto’s Bull Market Is Coming - Anil Lulla on CoinDesk The next bull market isn’t just about the bitcoin-dollar devaluation narrative but about decentralized finance providing a solid place to redeploy existing crypto capital. The Business Behind Marshmello - Kevin Lee on Twitter The unlikely story of the world’s second-highest paid DJ, including a bet on anonymity, a viral billboard making fun of Instagram influencers, and a cultural cooking channel on YouTube.
Aug 8, 2020
The Mounting Evidence of a New Bitcoin Bull Market
This week’s Breakdown Weekly Recap is all about that vibe you’ve been feeling - that inescapable notion a new crypto bull market is afoot. NLW looks at the evidence: * Rising gold price * Recirculation of crypto money out of zombie protocols * New growth in small holder addresses * Demand from emerging market p2p markets It’s just possible this new bull market isn’t just starting to be seen in narratives, but is also showing up in numbers.
Aug 7, 2020
11 Numbers That Tell the Story of the Economy Right Now
Mainstream financial media loves reporting the stock market like it's the only economic indicator that matters. On this episode, NLW breaks down 11 numbers that together tell a much more complete story, including: * Record price of gold * Square’s bitcoin revenue * National debt as a percentage of GDP * Fall of the Turkish lira * Price of coffee, sugar and cocoa * Housing in auto demand * Anti-Chinese sentiment in the U.S.
Aug 6, 2020
The History, Present, and Future of Central Banks, Feat. George Selgin
Today on the Brief: * Better news in the jobless claims this week * A new bitcoin adoption cycle? * A check in on Lebanon Our main conversation is with Dr. George Selgin. Dr. Selgin is a Senior Fellow and Director of the Cato Institute's Center for Monetary and Financial Alternatives as well as Professor Emeritus of Economics at the University of Georgia. In this eye-opening conversation, he and NLW go deep on the history, present and future of central banks, including: * Why the Scottish and Canadian banking systems in the 19th century that central banks aren’t a prerequisite for stability * Why the USA’s “free banking” system wasn’t free at all * Why the instability in the late 19th century US banking system was caused by regulation, not the lack of a Fed * Why the Fed’s first decades were a disaster * Why the Fed gets more power when it underperforms * The problems with the Fed’s response to 2008 * What lessons the Fed could have but didn’t l…
1 hr 19 min
Aug 5, 2020
Hedgeye CEO Keith McCullough on Stagflation, Bitcoin and the Devalued Dollar
Today on the Brief: * Robinhood doubles quarterly trading revenue * Square did $875 billion in bitcoin revenue in Q2 - up 600% YoY * ADP report: 167,000 jobs added in July (instead of expected 1.2 million) Our main conversation is with Hedgeye CEO Keith McCullough. Before building Hedgeye into a “no-excuses provider of real-time investment research and a premier online financial media company,” Keith worked at hedge funds including Carlyle Blue Wave Partners hedge fund, Magnetar Capital, Falconhenge Partners and Dawson Herman Capital Management. In this conversation, he and NLW discuss: * Hedgeye’s “Full Cycle Investing” approach and GIP (Growth, Inflation, Policy) methodology * How the economy was in a period of slowing growth and slowing inflation before COVID-19 * How we’ve moved into a stagflation period in response to the money printing prompted by the crisis * Why bitcoin, gold, emerging market stocks and commodities are likely to thrive in this env…
Aug 4, 2020
Can Social Media Be Redeemed? Feat. Early Facebooker-turned-Investor Bobby Goodlatte
Today on the Brief: * President Trump wants a cut of the TikTok deal * Previewing this week’s COVID-19 vaccine trade * Dave Portnoy breaks into bitcoin Our main conversation is with Bobby Goodlatte. Bobby is the founder of Form Capital, a new seed investment firm that focuses on supporting portfolio companies with value-add design. Bobby was an early employee at Facebook and has been an active angel investor since 2012, with investments that include Coinbase. In this conversation, he and NLW discuss: * The early days of Facebook * Why angel investors don’t like new angel investors to get involved * How Silicon Valley reflects larger questions of equity valuations * How social media has changed over the last decade * Why politics is now “downstream from algorithms” * Why there are still possibilities to build new social networks * Why today’s social networks could make different decisions that would be better for the world. Find our guest online: We…
1 hr 11 min
Aug 3, 2020
The Best of the Breakdown July 2020
Today on the Brief: * The TikTok-Microsoft Deal * The Twitter hacker was 17 * A changing of the guard for crypto hedge funds Our main discussion: recapping the best interviews of July 2020 Despite a huge variety of perspectives and experiences, one theme shown through in Breakdown conversations in July: the disparity between the stock market and the real economy and a growing unwillingness of people to accept their place in the order. This show features clips from: * George Gammon - @GeorgeGammon * Daniel Lacalle - @dlacalle_IA * George Goncalves - @bondstrategist * Sahil Bloom - @SahilBloom * Tyrone Ross - @TR401 * Tony Greer - @TgMacro * Jill Carlson - @jillruthcarlson * Michael Krieger - @LibertyBlitz * Sergey Nazarov - @SergeyNazarov
Aug 2, 2020
What Future Are We Building Bitcoin For?
Bitcoin started as a rebellious, anti-establishment technology. In many parts of the world, and for many people, it remains exactly that. At the same time, however, there is a wave of traditionalists and institutional players moving into the space. Are they buying into the revolution, or are they trying to capture value while fitting the disruption into a box that maintains the current power structure they lead? Those are the key questions explored by Meltem Demirors in her new essay “Unintended Architecture.” The piece is our selection for this week’s “Long Reads Sunday.”
Aug 1, 2020
Previewing the Economic Showdowns Coming This Fall
On this week’s edition of The Breakdown Weekly Recap, NLW argues the big story of the week was actually a set of smaller stories that preview the faultlines and economic debates likely to absorb us in the coming months. These include: * The Federal Reserve signaling that fiscal stimulus needs to do more * The beginning of the battles on fiscal stimulus * The introduction of the “not safe to vote” narrative * The Big Tech vs. The World fight * The beginning of coronavirus lawsuits * Back to school * Jobless claims getting worse * Kodak and reshoring
Jul 31, 2020
What a Professional Trader Thinks of the Fed, Robinhood and Real Estate, Feat. Tony Greer
Today on the Brief: * The DXY hits a 52-week low * Consumers seeking alternatives to cash * Bank of England rebuilds settlement system to work with CBDCs Our main conversation is with trader and analyst Tony Greer. In this conversation, he and NLW discuss: * The Federal Reserve’s role in increasing inequality * How the Robinhood crowd differs from the 1999 bubble * Why high-frequency traders might be the real villains when it comes to the retail bubble * Why gold is surging even though the dollar remains fundamentally sound * How to navigate the disparity between markets and the real economy * Why real estate is doing well even as the economy is floundering Find our guest online: Website: tgmacro.com Twitter: @TgMacro
1 hr 7 min
Jul 30, 2020
The Bond Market Is the Truth Teller No One Listens To, Feat. George Goncalves
Today on the Brief: * More bad news from jobless claims and the GDP * The big tech hearing was a whole bunch of nothing; watch TikTok instead * Robinhood dives into Kodak (but so do illegal insider traders) Our main conversation is with independent bond strategist George Goncalves. We discuss: * How the bond market watches Federal Reserve meetings * What, if anything, was new about this week’s FOMC meeting * What it means that the bond market and equities market tell different stories * Why the bond market has been telling a long-term story of slowing growth * Whether institutional investors are actually moving away from government debt and into gold * Why Judy Shelton should have a place on the Federal Reserve Find our guest online: Twitter: @bondstrategist
Jul 29, 2020
How DeFi Could Disrupt Traditional Finance, Feat. Sergey Nazarov
Today on the Brief: * Big tech goes to Washington * The debate on the next COVID-19 relief act heats up * More on institutional investors’ move into gold “Imagine a world without counterparty risk.” That was Chainlink co-founder Sergey Nazarov’s answer when asked to describe the true disruption of decentralized finance to a traditional finance audience. On this episode of The Breakdown, Sergey and NLW discuss: * Brand-based contracts vs. math-based contracts * The history of smart contracts * What it means to build an “abstraction layer” for “universally connected smart contracts” * Key moments in the history of smart contract infrastructure * Where smart contracts and DeFi are in terms of analogies to the early internet * Why Sergey believes traditional finance will inevitably shift to a math-based contract model Find our guest online: Website: Chainlink Twitter: @SergeyNazarov
1 hr 22 min
Jul 28, 2020
How Real Is Bitcoin’s Rally? 8 Interpretations of the $11k Surge
It was a beautiful Monday. Bitcoin crashed through $10,000 and got all the way up to a new yearly high of about $11,000 before retracing slightly. As with any dramatic price action, people were quick to start giving their interpretations of why it happened. In this episode, NLW explains eight of those interpretations, including: * Banks stacking due to changes in custody rules * Money printer go brrr * Stock to flow model * Robinhood traders piling in * DeFi gain recycling * Buyers exceeding sellers * “Perfect storm” * Dollar crash, negative real interest rates and the search for a new reserve currency Ultimately, NLW argues that it is this last factor driving up not only bitcoin but gold and silver.
Jul 27, 2020
SPACs 101: A Bubble, the Future or Both?
Special purpose acquisition companies have been around since the 1990s, but have seen a significant uptick in popularity in recent years. Companies like Virgin Galactic, Draft Kings and Nikola have changed SPAC’s reputation from a tool for second- and third-tier private equity shops to win fees to a legitimate alternative to initial public offerings. In 2020, SPACs have made up roughly 40% of the IPO market. Recently, chatter around SPACs reached a fever pitch with the listing of Bill Ackman’s Pershing Square Tontine Holdings - the largest-ever SPAC. In this episode, NLW breaks down: * What a SPAC is * Standard SPAC terms * Why the traditional IPO process has generated growing discontent, especially from Silicon Valley * The benefits of SPACs for companies and investors * The downsides of SPACs for companies and investors * A number of reasons explaining why SPAC popularity is surging now * How Robinhood retail traders are creating an important bridge buyer for SPA…
Jul 26, 2020
The Economic Conflict That Will Shape The Next Century
This week on Long Reads Sunday, our selection is “Whose Century?” by Adam Tooze in the London Review of Books. Nominally a review of four recent scholarly works on the conflict between the US and China, Tooze main argument is that the central problem with viewing this as a new Cold War is the idea that it is new. Instead, we need to understand that, contra Fukiyama’s famous essay, history didn’t end in 1989 - at least not for the Chinese. What’s more, the narrative of having “won” the Cold War fails to take into account our spectacular failures in Asia. Only by reframing our understanding can we make sense of the most important geopolitical conflict of the coming century.
Jul 25, 2020
As Economic Indicators Get Worse, the US Revs Up the Next Multi-Trillion Stimulus
This week on the Breakdown Weekly Recap, NLW covers: * A terrible week for US-China tensions, with dueling Consulate closures and an incredibly hawkish speech from US Secretary of State Mike Pompeo * Worsening economic indicators, particularly around jobless claims which saw their first weekly rise in four months * The likely size of the next US stimulus bill - $1T to $3T
Jul 24, 2020
Could the European Recovery Plan Actually Break Europe Apart? Feat. Tuomas Malinen
Today on the Brief: * Which industries are recovering the best * China retaliates against U.S. after consulate shutdown * Dollar heads toward its worst month since 2018 Our main discussion features returning guest Tuomas Malinen, CEO of GnS Economics. In this discussion, Tuomas and NLW discuss: * An outline of the European Union’s new recovery plan * The new debt issuance structure that marks a first for Europe * The challenges of currency unions * How Europe’s debt crisis changed how Europeans think about economic integration * Why the current plan amounts to “stealth federalization” * Why some member states are in a state of mutiny over the fund Find our guest online: Website: GnS Economics Twitter: @mtmalinen
Jul 23, 2020
Will Big Tech Enable or Destroy Small Business? Feat. Sahil Bloom
Today on the Brief: * Disappointing jobless claim numbers with first increase in 4 months * US banks now allows to custody crypto * Senate hears arguments for a digital dollar in the context of US-China economic competition Our main conversation with Sahil Bloom Sahil Bloom is an investor with Altamont Capital Partners and a prolific author of financial literacy Twitter threads. In this conversation, he and NLW discuss: * Today’s jobless claims * Long term economic impacts from COVID in the travel industry * “Forced efficiency realization” * How remote work opens white collar professionals to global competition * Whether tech platforms are a destructive or enabling force for small business * Why financial education is essential and sorely lacking * Why the Robinhood rally crowd represents a positive opportunity for bringing new voices into the markets Find our guest on Twitter: @sahilbloom
Jul 22, 2020
A Simple Explanation of DeFi and Yield Farming Using Actual Human Words
Today on the Brief: * US Gov’t forces China’s Houston consulate to close * US previously-owned housing market grows 20.7% May to June * Insider stock selling reaches record levels Our main discussion: DeFi 101 Today’s episode of The Breakdown is a primer for anyone who has lost track of the terminology surrounding decentralized finance. In it, NLW goes over: * DeFi’s background and origins * Market making in a traditional context * Automated market making * How liquidity mining incentives economic participation * How decentralized exchanges differ from centralized exchanges * What “yield farming” actually means * Why we shouldn’t be concerned about the Yield Farming bubble
Jul 21, 2020
Is the Fed About to Start Promoting Inflation?
Today on the Brief: * EU leaders agree on $2 billion stimulus package * LinkedIn job cuts show weakness in the professional sector * Has DeFi jumped the shark? Our main discussion: The Fed’s changing inflation strategy University of Oregon professor and Bloomberg columnist Tim Duy recently penned a piece called “The Fed Is Setting the Stage for a Major Policy Change” arguing that we’re likely to see more inflation, promoted by the Fed. In this episode, NLW breaks down: * Why the Fed is turning away from its traditional inflation forecasting method * Why the Fed is likely to let real inflation hit 2% before doing anything * Why some are calling the move “simply asinine” * Why some think the Fed is full of hot air and has no power to actually create inflation * Why the Fed is trapped by its definition of inflation Audio clip featuring Alhambra Investments head of research Jeffrey Snider in an interview with Emil Kalinowski.
Jul 20, 2020
What Is GPT-3 and Should We Be Terrified?
Today on the Brief: * Mastercard, Standard Chartered and PayPal all deepen their engagement with crypto * Japan inches closer to a central bank digital currency * The real estate “doom trade” opens up Our main discussion: GPT-3 Generative pertained transformer-3 – or GPT-3 as it’s better known – absolutely took over the internet this weekend. It’s a new AI language model that can do some truly incredible things, from writing poetry to composing business memos to generating functioning code from natural language descriptions. In this episode of the Breakdown, NLW provides a 101-level overview of GPT-3, including: * What an AI language model is * Why AI for language is more difficult than image-based AI * The background of OpenAI, the Elon Musk-backed project behind GPT-3 * Some examples of what GPT-3 can do * Why reasoning and narrative still elude the technology Reference posts: GPT-3 Examples, a Twitter Thread Jonathan Johnson on AI Language Mode…
Jul 19, 2020
Are Stablecoins Eurodollars 2.0? Long Reads Sunday
On this week’s Long Reads Sunday, we look at two essays about stablecoins previously published on CoinDesk. The first is called “USD Stablecoins Are Surging, but Zero Interest Rates Complicate Business Model” by Hasu and was one of the first pieces to recognize that demand was coming not just from the crypto space but from emerging markets facing crisis time currency pressures. The second is “Hyper-Stablecoinization: From Eurodollars to Crypto-Dollars” from Pascal Hügli. The piece argues that stablecoins are likely to play an increasingly important role in the global economy. In effect, they are a better version of the critical eurodollar system.
Jul 18, 2020
Social Media Is Democracy’s Faultline: The Breakdown Weekly Recap
On this edition of the Weekly Recap, NLW explores: * No-volatility bitcoin and DeFi’s big quarter * An uptick in central bank currency action * PayPal crypto confirmation * A China-U.S. rhetoric flare up * Social media as democracy’s fault line * In Fed World, is the narrative trade the only trade?
Jul 17, 2020
What If the Too-Strong Dollar Is a Solved Problem? Feat. Jon Turek
Today on the Brief: * The latest information in the Twitter hack * Thailand starts using its central bank digital currency * Treasury Secretary Mnuchin calls on Congress for more funds Our main conversation is with Jon Turek, author of “Cheap Convexity.” In this conversation, he and NLW discuss: * Why the dollar has gotten stronger thanks to a savings glut from Asia * How a too-strong dollar hurts other markets more than the U.S. * Why globalization died in 2011 and we just didn’t realize it * How the Fed fixed the global dollar plumbing * Why there are still questions of actual dollar shortages * The detente in U.S.-China financial relations Find our guest online Website: Cheap Convexity Twitter: @jturek18
1 hr 5 min
Jul 16, 2020
No, the Twitter Hack Wasn't about Bitcoin
Today on the Brief: * Adjustment to bank profits in anticipation of growing debt delinquency * The lowest decrease in jobless claims since March * A boost in retail spending Today’s main discussion: The Great Twitter Hack, feat. Dr. Tom Robinson, chief scientist and co-founder of Elliptic Wednesday, at around 2:15 p.m. EDT, prominent Crypto Twitter accounts started sharing a similar message about a bitcoin giveaway. A couple of hours later, Elon Musk and Bill Gates were saying they were feeling generous and wanting to give bitcoin away. A couple more hours and every verified blue check mark account on Twitter was taken down. It was an attack with massive implications, if not much monetary gain. On this episode NLW breaks down: * What happened * Which accounts were impacted * How much BTC was transferred * The narrative battle of “bitcoin scam” vs. “Twitter hack” * Why it might have been a state-sponsored attack * Why the real intention might have been…
Jul 15, 2020
A Primer on the US and China's 'New Cold War'
No geopolitical relationship will shape the world over the coming decade as much as that of the U.S. and China. A day after President Trump signed the Hong Kong Autonomy Act enabling sanctions on those that threaten the autonomy of China (and the companies that do business with them) and the UK worked to ban Huawei 5G infrastructure, this episode of the Breakdown looks at the key faultlines and issues that have that relationship in a dangerous downward spiral: * Virus blame recriminations * Trade war tensions * The Hong Kong Security Law * Huawei 5G and critical digital infrastructure * TikTok * India border skirmish * South China Sea Military Exercises * The politics of labeling this a “new cold war”
Jul 14, 2020
Why Are Execs of Bankrupt Companies Being Rewarded With Millions?
Today on the Brief: * A followup on Tesla, corporate earnings and PayPal’s crypto ambitions * New COVID-19 shutdowns in California * Small businesses on the brink Our main conversation: Bloomberg has reported recently bankrupt companies including J.C. Penney and Hertz had provided executives with more than $131,000,000 in bonuses. On this episode of The Breakdown, NLW examines: * The logic behind these bonuses * Why that logic is stupid * How this sort of reward for personal failure in the wake of 2008 led to the rise of populism on the right and left * Why we should allow companies to fail * Why people’s sense that the system is a crony system isn’t wrong
Jul 13, 2020
The Real Story Behind Tesla's Crazy Rally
Today on the Brief: * Wall Street quarterly earnings season opens * Investor flock to higher-yielding Chinese government bonds * Bitcoin whales go down but other types of HODLers go up Our main conversation: What the hell is going on with $TSLA? Elon Musk is now richer than Warren Buffett. A year ago, Tesla wasn’t as valuable as Ford or GM. Now it’s more than 25% of the value of the auto market as a whole. In this episode, NLW looks at a set of possible explanations: * Elon as a Golden God/the cult of personality * Tesla as an innovative tech company * Better-than-expected vehicle delivery * The mother of all short squeezes * Robinhood effect * Mr. FEDerico * Narrative Market Machine In the end, NLW argues that in a world where 1) the new retail base is willing to engage in narrative and meme warfare and 2) where the Federal Reserve distorts prices, the narrative market machine becomes more of a driver of prices than ever before.
Jul 12, 2020
Does COVID-19 Have The World Rethinking Dollar Supremacy?
On this episode of Long Reads Sunday, we look at Professor Stephen S. Roach’s piece “The Covid Shock To The Dollar.” In it, he argues: * Americans have been squandering their savings potential * Because of this, we are forced to borrow surplus savings from abroad * We have usually been able to do this on favorable terms * That window may be coming to a close * There could be a 35% drop in the dollar over the next 2-3 years
Jul 11, 2020
The Mixed Signals Economy: The Breakdown Weekly Recap
On The Breakdown’s Weekly Recap, NLW explores: * The final tally on the TikTok Doge viral campaign * The growing geopolitical tension between China and the US and where it’s manifesting * Positive economic indicators in reduced jobless claims * Negative economic indicators in growing COVID-19 cases and deaths * Why bitcoin is sideways * Why Treasury yields are down * Why gold is up
Jul 10, 2020
Against Outrage Culture: Why Michael Krieger Ended Liberty Blitzkrieg
Today on the Brief: * Hong Kong re-closes schools based on COVID-19 growth * Coinbase explores direct U.S. exchange listing * China starts selling stock, easing massive rally Our main conversation is with Liberty Blitzkrieg creator and editor Michael Krieger. Michael announced just before recording that he is done publishing on the LB site. He and NLW discuss: * How Michael became disaffected while working on Wall Street during the Great Financial Crisis * How Zero Hedge amplified Liberty Blitzkrieg and sent Michael on a decade-long writing path * How Michael discovered bitcoin and the bitcoin community in 2012 * Why social media platforms need to be regulated with the principles of the First Amendment * How all political parties use division to stay in power * How outrage culture has become endemic, commodified and co-opted by existing power * Why the only option to fight outrage culture is to opt out Find our guest online: Website: libertyblitzkrieg.com Twitt…
1 hr 17 min
Jul 9, 2020
Social Chaos and Bankruptcy Rallies: The Best Insights From FinTwit June 2020
Today on the Brief: * Slight good news in new and continuing jobless claims * Record corporate equity and debt sales during the crisis * USDC freezes $100k Our main conversation: Introducing the Macro Media Index. The Macro Media Index is a monthly summary of the best macroeconomic tweets, essays, podcast and videos from around the internet. In this inaugural edition, NLW looks at a few key themes: * The disconnect between the market and the real economy * The role of the Fed and monetary policy in growing wealth inequality and social unrest * The Robinhood Rally and bankruptcy bet that took institutional investors by complete surprise * The great inflation vs. deflation debate Featuring insight from previous Breakdown guests including Luke Gromen, Lyn Alden, Jesse Felder, Preston Pysh and more.
Jul 8, 2020
TikTok Doge Is Everything About 2020 Finance In One Story
What’s old is new again! What happens when you combine a mostly hibernating memecoin with the world’s most powerful (and controversial) meme platform, and throw in a new generation of daytraders that have become convinced that they can drive the price of anything up? The great TikTok Doge pump of 2020, of course. In this episode, NLW breaks down: * The history of Dogecoin * How TikTok became one of the most popular, influential, and controversial apps in the world * Why the r/WallStreetBets, Davey Day Trader Global Global, and Robinhood Rally day trader movement perfectly set up this pump * How #TikTokDogecoinChallenge began to trend * What has happened to Dogecoin since the trend started * Why this all makes a weird sort of cynical sense
Jul 7, 2020
Central Banks Cannot Print Jobs: Understanding Real Economic Recovery, feat. Daniel Lacalle
Today on the Brief: * Social media apps get caught in geopolitical tensions * Pitchforks around the Paycheck Protection Program * Brazil blocks Binance Our main discussion is with Daniel Lacalle. Daniel is chief economist at Tressis and is the author of numerous books including “Life in the Financial Markets,” “Escape from the Central Bank Trap” and his most recent, “Freedom or Equality.” He has been named one of the 100 most influential economists in the world by Richtopia. In this conversation, he and NLW discuss: * Why the recovery will likely be “L” shaped and uneven, not “V” shaped * Why the “bailout of everything” undermines capitalism and promotes zombie companies that can’t service their debts * Why zombie companies crowd out space for startups and small businesses * How government programs can incentivize relationships with government over strong business practices * How the current economic crisis could become a banking crisis Fi…
1 hr 5 min
Jul 6, 2020
China Stocks Surge and NYC Real Estate Craters: 5 Stories Shaping Markets Today
In this extended Brief, NLW tells the story of the economy through five themes: The story of the economy as told by five macroeconomic indicators including Chinese stocks, New York City real estate, coronavirus cases and more. * China stocks surge – but how much is it driven by Chinese state-sponsored media hype? * A tale of two cities – real estate in New York City and Hong Kong are telling very different stories * A global currency crisis in Lebanon - foodstuffs are up 100% in the last two weeks as the pound continues to falter * The COVID-19 ticker - daily cases continue to grow in the U.S. but deaths are declining * The cost of the U.S. losing its place in the world - from travelers turned away in Italy to decreasing capital inflows * Plus a bonus: what the Nasdaq all-time highs really mean
Jul 5, 2020
Why Bitcoin Matters For Freedom [Long Reads Sunday]
An appropriate post-July 4th episode of the Breakdown's #LongReadsSunday featuring Human Rights Foundation CSO Alex Gladstein's "Why Bitcoin Matters For Freedom" Read the original on Time Follow Alex on Twitter
Jul 4, 2020
It’s Time for a Revolution in Financial Education, Feat. Tyrone Ross
Financial education and financial literacy are at crisis levels in this country. Financial advisers spend billions on advertising but a fraction of that on education. The resources that are available tend to be inaccessible and not designed for the people who need them most. Financial media remains a boring, exclusionary acronym game. The net result of all of this is a population of Americans who don’t have the mental tools to understand, make sense of and make good decisions around their finances. In this passionate conversation with NLW, financial adviser Tyrone Ross argues that all hope is not lost. According to Tyrone: * Financial literacy is a cross-cutting crisis not limited to any one demographic * Even the resources that do exist aren’t designed for the way their intended targets consume media * Despite all the bad things happening, this moment is also providing an inflection point where change is possible Find our guest online: Website: tyroneross.io Twitter: @T…
Jul 3, 2020
Here’s How to Expand Who Contributes to Bitcoin Core
OKCoin and BitMEX recently came together to provide a $150,000 grant to Bitcoin Core developer Amiti Uttarwar. In this conversation, Amiti and OKCoin CEO Hong Fang discuss: * Why OKCoin believes it is essential for companies in the space to support Bitcoin Core development * How OKCoin and BitMEX came together around this grant * Why Amiti is focused on the P2P layer * Why Amiti believes Bitcoin should be private by default * Why Bitcoin Core will better serve more populations if more populations are represented in who is building it Find our guests online: Hong Fang Website: https://www.okcoin.com/ Twitter: @hfangca Amiti Uttarwar Twitter: @amizi
Jul 2, 2020
Why the Robinhood Revolution Is the Future of Finance, Feat. Jill Carlson
Even before the COVID-19 crisis, Reddit’s WallStreetBets channel was featured on the cover of Bloomberg BusinessWeek as an emerging market force. Since then, between the surge in signups for Robinhood and the wave of followers of Davey Day Trader Global Global, these day traders have taken an even bigger place in the conversation about the stock market. While many finance professionals (and, most certainly, traditional financial media) have treated the movement with skepticism, paternalism or outright derision, Slow Ventures’ Jill Carlson has a very different view. To Jill, this group represents a new wave of investors who are unwilling to wait for permission to play a game that has been largely closed off to most. In this conversation, Jill talks about why the Robinhood revolution is very, very real, and what opportunities for entrepreneurship and investing she sees in terms of financial education, new exchange tools and more. Find our guest online: Website: jill-carlson.com…
Jul 1, 2020
Satoshi’s Unappreciated Marketing Genius, Feat. Dan Held
Satoshi Nakamoto is often recognized for his technical genius in solving the double spend problem. He is also widely revered for his willingness to walk away from the protocol to make it stronger, something no other entrepreneur who has created anything on the scale of Bitcoin has ever done. What people discuss less often is Satoshi’s marketing instincts. In this illuminating conversation, serial bitcoin entrepreneur Dan Held argues: * Satoshi had strong instincts about how price would drive bitcoin adoption * The bitcoin white paper document was a marketing pitch aimed specifically at the cypherpunks * The competition between bitcoin narratives is something that gives the protocol strength * The competition to shape bitcoin's narrative is truly free and open to all
Jun 30, 2020
‘It Sure Doesn’t Feel Like the Greatest Economy of All Time,’ Feat. George Gammon
What would you do if you were approaching your 40s, burned out and realizing the type of financial success you had been pursuing wasn’t actually serving your true goal of freedom? If you were George Gammon, the answer would be to change everything and start globetrotting in search of new opportunities. George Gammon is the host of the rapidly growing George Gammon YouTube channel and Rebel Capitalist podcast. He is rapidly building one of the most rapid macro and investing fanbases around. In this Free Ideas Festival conversation, he and NLW discuss: * The pursuit of personal freedom * Producing a home-flipping TV show in Colombia * Why inflation is at the heart of people’s economic discontent * How crony capitalism is driving young people to Communism * Building a rapidly growing podcast and YouTube empire
1 hr 6 min
Jun 29, 2020
How the Fed Fans the Flame - The Best of The Breakdown June 2020
June 2020 will go down in the history books as an extremely chaotic and confusing period. In this “Best of the Month” retrospective, we look at some of the best guest conversations from The Breakdown, including: * Human Rights Foundation CSO Alex Gladstein on the importance of cash for privacy * DigiChina Editor-in-Chief Graham Webster on China’s decade-long turn away from liberalism * Alhambra Investments lead researcher Jeff Snider on why the Federal Reserve’s power is a myth * Popular Front founder Jake Hanrahan on the media’s veneer of objectivity * Castle Island Ventures’ Nic Carter on why people should have rights to their social media profiles * The Crypto Dog on mining bitcoin in 2011 * Independent macro analyst Jesse Felder on the Fed’s role in increasing inequality * BlockTower Capital’s Ari Paul on how people lose faith in central banks * “Think For Yourself” author Dr. Vikram Mansharamani on the recipe for inflation * Independent oi…
Jun 28, 2020
A Primer on the Eurodollar and Shadowbanking System [Long Reads Sunday]
The latest Long Read is "Crypto Dollars and the Evolution of Eurodollar Banking" by Avi Felman and Max Bronstein. This piece covers: * The Dollar Milkshake Theory * Why the demand for the US dollar remains so high * Why demand for dollars is increasing rather than decreasing * What "eurodollars" are * What the shadow banking system is * How eurodollars and shadow banking contribute to USD demand * How stablecoins and cryptodollarization could create demand for crypto
Jun 27, 2020
Welcome to the Groundhog Day Economy (PS, It Sucks) - The Breakdown Weekly Recap
As states shutter economic activity because of preventable COVID-19 outbreaks, it’s deja vu all over again. This is a movie we’ve seen before: * Rise in what could have been preventable COVID-19 cases * A call for shutdowns (plus voluntary closures) * Rampant politicization of health and economic issues rather than common sense approaches * Persistent jobless claims plus new layoffs * Wall Street nerves turning into new Federal Reserve and Treasury action Rinse, repeat, economy!
Jun 26, 2020
How Monopolies Sow the Seeds of Their Own Destruction, Feat. Tuur Demeester
Today on the Brief: * A consumer spending rebound * A new crypto regulatory regime in Europe * A bitcoin warning from a famed investor Our main discussion: Tuur Demeester is the managing partner of Adamant Capital, a bitcoin investment firm that earlier this year published “The Bitcoin Reformation.” In this conversation, he and NLW discuss: * The four preconditions for a reformation, and how they apply today * How hyperinflation contributed to the French Revolution * Why inflation is becoming a more significant threat today * How bitcoin memes function like unifying doctrines from past revolutions * Why millennials could be the Greatest Generation 2.0 Find our guest online: Twitter: @TuurDemeester On the web: Adamant Capital
1 hr 10 min
Jun 25, 2020
Is Scam Selling Suppressing the Price of Bitcoin?
Today’s edition of The Breakdown is an extended version of the Brief, this time covering five topics. * New Jobless claims - sticking stubbornly at ~1.5 million new claims per week, despite economist expectations * The “whack-a-mole” economy - Former Treasury Secretary Lawrence Summers predicts as much as 30% of the economy may need to close to get COVID-19 under control * PlusToken scam pressure on BTC price: Has scam selling suppressed the price of bitcoin since early last year? * Biggest ever bitcoin option expiry; more than $1 billion in notational value BTC options are set to expire tomorrow, Friday, June 26 * Apple’s UX privacy triumph: Users will have to opt-in to allow apps to track them across other apps as well
Jun 24, 2020
Bull vs. Bear: Who Has the Economy Right?
The economy is nothing if not confounding right now. Across every domain, from real estate to oil to retail, there are bull signals and bear signals. In this episode, NLW looks at those signals in the following areas: * Markets - strong stock recovery vs. growth in cash deposits * Employment - growth in jobs vs. persistent continuing jobless claims * Retail - growth in foot traffic vs. demand destruction * Oil - growth in demand (but not in economically productive diesel) * Real estate - surge in mortgage applications vs. worst home sales since 2010 * Dollar - declining confidence vs. there is no alternative * COVID-19 - reduced death rates in the U.S. vs. growing caseload What’s the answer? Is this just a narrative mirage recovery? Listen and find out.
Jun 23, 2020
Oil 101: How Easy Money Enabled the Shale Revolution, Feat. Tracy Shuchart
Today on the Brief: * PayPal and Venmo reportedly adding crypto buying and selling * Trump executive order temporarily suspends H1-B visa program * Continued growth in bitcoin derivatives Our main conversation: Tracy Shuchart is an oil- and commodities-focused trader in the private equity space known for her wide-ranging insights on financial Twitter (FinTwit). In this conversation, she and NLW discuss: * Why the shale revolution of the last 10 years shifted the power balance in global energy among the United States, Russia and Saudi Arabia * How easy money in the wake of the Great Financial Crisis enabled the shale revolution as much as new technology * Why after the 2014-2016 oil crash it was inexperienced private equity firms that picked up where banks left off with shale * How a growing focus on dividends and cutting costs was creating structural problems for shale even before the COVID-19 crisis * How COVID-19 coincided with a contentious negotiation between S…
1 hr 16 min
Jun 22, 2020
Macro Investors Sound Off! Featuring Ari Paul, Spencer Bogart and David Nage
Today on the Brief: * New Federal Reserve research suggests reaction to Facebook’s Libra basket approach was overblown * Italian Banking Association pushing to test a digital euro * U.S. housing has worst month since 2010 Our main conversation: Earlier this month, Messari hosted the Mainnet virtual summit. At that event, NLW moderated a session called “Macro Investors Sound Off!” featuring BlockTower Capital’s Ari Paul, Blockchain Capital’s Spencer Bogart and Arca’s David Nage. The discussion included: * The evolution of the Fed put and how it shapes the markets * How the collision of Bitcoin’s halving and the Fed’s reaction to COVID-19 created a powerful narrative moment * Why the “Money Printer Go BRR” meme was so effective * Why the Paul Tudor Jones letter was hugely influential within family offices * Why these investors expect to see some significant announcements around bitcoin exposure from traditional investors in the months to come Fin…
Jun 21, 2020
Fight the Fed or Love the BRRR? [Long Reads Sunday]
A reading of two pieces How I Learned to Stop Worrying and Love the Money Printer by Jill Carlson | CoinDesk + Fight the Fed Jesse Felder | The Felder Report
Jun 20, 2020
A Dozen+ Statistics Proving Millennials Are F%#$&D: The Breakdown Weekly Recap
The big narrative in financial media for the last few weeks has been the insurgent Robinhood rally, led by the AC/DC-blaring Pied Piper Dave Portnoy, owner of Davey Day Trader Global Global (DDTG Global). As people try to make sense of the strange retail trading phenomenon, one perspective is the participants (average age of 31 on Robinhood) are reacting to a market that has left them behind. In this view, they are assaulting the market with otherwise outrageous and ludicrous strategies because, otherwise, how will they get their piece? This week’s Breakdown Weekly Recap looks at this in the context of some surprising (and frankly depressing) stats about the millennial generation’s current wealth, as compared to where boomers were at the same time in their careers.
Jun 19, 2020
Why Monetary Debasement Is Here to Stay, Feat. Dr. Vikram Mansharamani
Today on the Brief: * FTX lists two Compound tokens * Reddit partners with Ethereum Foundation on Layer 2 scaling * Black-In Freedom Festival reimagines Juneteenth Our main topic: Dr. Vikram Mansharamani is a lecturer at Harvard and author of “Boombustology: Spotting Financial Bubbles Before They Burst” as well as the just released “Think for Yourself: Restoring Common Sense in an Age of Experts and Artificial Intelligence.” In this wide-ranging conversation, he and NLW discuss: * Why our relationship with experts and expertise is leading us astray * How COVID-19 shows the downside of both over-reliance on, and complete rejection of, experts * How the economic crisis surrounding COVID-19 is bursting bubbles and moving us from a period defined by deflation to one defined by inflation * Why “monetary debasement is here to stay” * Why the U.S.-China relationship is the key backdrop for understanding the next 10 years of global economic reality * Why ineq…
1 hr 9 min
Jun 18, 2020
6 Things Jobless Claims Tell Us About the State of the Real Economy
Today on the Brief: * Powell says private companies shouldn’t be involved in Central Bank Digital Currencies * According to former NSA head John Bolton, Trump told Mnuchin to go after Bitcoin * Interest around Compound driving speculation around a DeFi-driven bull run Our main topic: This week’s U.S. jobless report brought bad news. Whereas economists had expected new claims to fall to 1.29 million from 1.57 million the week before, claims fell just 58,000 to 1.51 million. Continuing claims fared even worse. Economists predicted these claims would fall 600,000+ to 19.9 million. Instead, they fell a tenth of that - 62,000 - to leave total continuing claims at 20.5 million. In this episode, NLW breaks down what we can learn from these numbers when they’re combined with the previously released May jobs report.
Jun 17, 2020
The Satoshi-fication of Social Media: Why The Future Is Pseudoanonymous, Feat. The Crypto Dog
On the Brief: * Big tech vs. the American political right and left * Why TikTok users are pretending to love China for clout * Decentralizing venture capital Our main conversation: The Crypto Dog is one of crypto Twitter’s best known characters. In this conversation, he and NLW discuss: * Mining bitcoin in 2011 * The difficulty of hodling across a decade * The emergence of the crypto trader in the Ethereum era * Trader agnosticism * Pseudo-anonymity and social media * Developing the character behind the avatar * Global nomadism and the acceleration of “work from anywhere” * The vibe and feel of Hong Kong today Find our guest online: Twitter: @TheCryptoDog
Jun 16, 2020
The Fed's Folly: From Moral Hazard to Business as Usual, Feat. Jesse Felder
Today on The Brief: * An unexpectedly good retail sales report drives market confidence * Are we in for a second wave of white-collar layoffs? * The latest rumblings in central bank digital currencies Our main conversation: Jesse Felder is an independent financial analyst and one of the best financial curators on Twitter. In this wide ranging conversation, he and NLW discuss: * The Robinhood rally and what makes it both alike and different from previous manias * The illusion of American recovery and the disconnect between markets and fundamentals * The Federal Reserve’s role in increasing economic inequality * Why the dollar is significantly overvalued relative to other currencies * Why financial assets could be poised for a rough decade Find our guest online: * Twitter: @jessefelder * Website: The Felder Report
1 hr 14 min
Jun 15, 2020
Sorry, Bloomberg: Here Are 6 Reasons Why 2020 Is a Great Year for Bitcoin
Today on the Brief: * Stocks down on coronavirus fears * Demand destruction * The looming retirement crisis Our main theme: Bitcoin is up more than 30% on the year. After a crash alongside equities, it has proved incredibly resilient. There are famous new entrants to the space like Paul Tudor Jones II. So how can a Bloomberg editor argue the year has been bad for bitcoin? In this response podcast, NLW argues that most of the arguments are about narrative, not the underlying fundamentals. He presents six reasons why not only has it not been a bad year, but the exact opposite is true: * Demonstrated institutional uptake * Demonstrated resilience * New champions * Narrative fundamentals * Need in emerging markets * End of economic orthodoxy
Jun 14, 2020
BONUS: Rubbish Rallies and Investor Amnesia by the Finance History Guy Jamie Catherwood
After a week where bankrupt Hertz pumped 890%, the question is: what is the historical precedent? Luckily, we have finance history guy Jamie Catherwood to fill us in. In this essay "Rubbish Rallies" (written by Jamie, read by NLW), Catherwood tells the story of an 1820s scam that turned into an 1860s market mania - even though everyone knew it had been a scam the first go around. History might not repeat, but it certainly rhymes. This is a bonus episode of The Breakdown, recorded originally last week as part of a private beta test for new content forms. If you like this type of episode, let me know @nlw on Twitter.
Jun 13, 2020
The Chad Index Versus Doomer Internet Money: The Breakdown Weekly Recap
The stock market has long been disconnected from the underlying economy, but much of what happened this week - particularly the pumping of bankrupt company stocks - suggests that something new is afoot. In this episode, NLW breaks down three long-term trends suggested by the so-called Robinhood Rally, including: * The “insurgency” aspect of a generation of young professionals who are willing to play the financial game rather than have it be played for them * A totally new force in financial media, which could hit like a wrecking ball in one of the stodgiest, traditional media industries * An embrace of a certain type of cynicism or nihilism when it comes to the values of financial markets This week on The Breakdown: Monday | Why War Reporting Is the Right Mental Model for Today’s Media, Feat. Jake Hanrahan The founder of Popular Front joins NLW for a discussion about protests, media and how the people being covered tend to not reflect divisive politics. Tuesday | What…
Jun 12, 2020
Avoiding the Narrative Trap: Bitcoin Is More Than an Inflation Hedge
Today on the Brief: * Why bitcoin sold off * A bank-the-unbanked narrative for the digital dollar * It’s Dave Portnoy’s world and we’re all just living in it Today’s main topic: Why inflation isn’t the only bitcoin narrative that matters. When bitcoin’s halving coincided with the most aggressive central bank policy of all time, it set a clear narrative framework for bitcoin as an inflationary hedge. This was captured by people like legendary hedge fund investor Paul Tudor Jones, who warned of a “great monetary inflation.” In this episode, NLW argues 1) that inflation could be a dangerous narrative to focus on too closely due to a number of countervailing deflationary forces, and 2) there are a variety of other narratives that are just as important to bitcoin, including: * Censorship resistance * Seizure-resistant asset * Currency controls and reshoring * Nations looking to escape USD system * Independent banking * Peaceful protest