The Breakdown

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

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

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. 

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.

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.

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

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

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

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.comTwitter: @LukeGromen

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