The Breakdown

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

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 

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.

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. 

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.

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 learn between the Great Financial Crisis and COVID-19 

Find our guest online

Website: Alt-M.org

Twitter: @GeorgeSelgin

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 environment 
• Why most narratives are BS 
• Why the “Old Wall” media distracts rather than educates

Check out our guest online:

Website: Hedgeye.com 

Twitter: @KeithMcCullough

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:

Website: Form Capital 

Twitter: @rsg 

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

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.”