The Breakdown

In this episode of The Breakdown, @NLW reflects on the themes that defined an absolutely wild week in global markets and society. 

Those themes include:

• Unlimited QE - broad new powers (corporate bond buying anyone?) and an unlimited checkbook for the Fed 
• Digital Dollars - a surprise inclusion of a digital dollar in an early Stimulus draft shifts the Overton window
• Narrative Shift to “Grandma Dies For The Dow” - narrative analysis that suggests that the “just the flu” of two weeks has become “business closures will kill more than COVID”
• Stimulus as Corporate Socialism - a huge bailout for businesses explained away by something that Taleb says is decidedly NOT a Black Swan
• The Last Break of Institutional Trust - jobless claims were 4x higher than the previous record on the same day the stock market went bull again - trust in leadership is dead
• Surveillance - a growing concern with surveillance - such as the new CDC program earmarked in the Stimulus package
• Bitcoin difficulty adjustment - as Preston Pysh put it “this thing is so resilient it’s almost laughable” 

The Senate passed $2T in Stimulus. That includes a one time $1,200 check to impacted individuals and….you guessed it, billions and billions for corporate relief. Included in that are hundreds of billions of dollars in corporate bond buying programs. The Federal Reserve has recruited asset management giant BlackRock to administer three of those programs. 

Here’s the kicker. As Bloomberg describes it: “under the arrangement [BlackRock] could buy some of its own funds on behalf of the central bank.” 

Outrage is running rampant, and to help listeners sort through it, @NLW is joined by Meltem Demirors, Chief Strategy Officer at CoinShares. In this conversation, they discuss:

• The government mechanics behind the “money printer go brrr” meme 
• The unfathomable failure of US intelligence in seeing the pandemic coming 
• The deficit of leadership across the political spectrum 
• What Blackrock means and why “they’re not even pretending anymore” 
• Why Twitter memes on their own can’t change the world
• Why bitcoin can and should be a gateway and tool for evangelizing more systemic change

CoinDesk’s Chief Content Officer Michael Casey and Head of Research Noelle Acheson join for a lively debate about the new $2 trillion stimulus package and era of “unlimited” QE, including:

• Whether (and on what time scale) fiscal and monetary stimulus might lead to inflation
• Whether the Fed buying corporate bonds amounts to a nationalization of the bond markets
• Why the appearance of a ‘digital dollar’ in an earlier stimulus proposal was a huge surprise
• How a digital dollar in the form proposed would upset the balance of power between the Fed, commercial banks, and citizens 
• Why trust in governments and financial institutions is likely to achieve new lows in the wake of COVID-19
• Why people are reevaluating the meaning and purpose of money   

Mark Yusko is the founder of Morgan Creek Capital Management. In this wide-ranging conversation, he and @NLW discuss: 

• Why bitcoin has fallen with stocks over the last few weeks
• Why price and value are not the same thing
• Why stocks have been manipulated 
• An argument for buy backs being illegal 
• Why cronyism is not capitalism 
• Why bailouts and other types of intervention help zombie companies that should perish
• A debate about whether the “cure is worse than the disease”
• The costs of a 0-risk tolerance 
• The polarization of health vs. economics 
• Why there should be a market holiday 
• Why bitcoin is the last and only free market 
• Why the big market announcements are always on Sunday 
• Why we’re headed to debt jubilee 
• There is a non-zero probability that Trump tries to cancel the election  
• Why a lack of leadership is the biggest cause for pessimism today

Last October, Ikigai Asset Management’s Travis Kling predicted that Central Banks would have to “juice QE to infinity” in order to save markets from recession. Yesterday on 60 Minutes, Fed President Neel Kashkari said “there is an infinite amount of cash at the Federal Reserve. We will do whatever we need to do to make sure there is enough cash in the financial system.” 

This was followed this morning by an announcement that the Fed was giving itself effectively unlimited capacity to intervene in markets. Markets were...still not impressed. In less than two hours, an initial gain had entirely retraced. 

On this episode of The Breakdown, @NLW looks at:

• Specifics details of the Fed Announcement
• Why FinTwit and Bitcoin Twitter are focusing on inflation 
• Why some think that this action amounts to a nationalization of markets
• How the ‘money printer go brrr’ meme is taking hold