The Breakdown

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  

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

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

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

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.

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 Models Rob Teows: GPT-3 Is Amazing – And Overhyped

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.

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?

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

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 to discredit Twitter  Why the (supposed) revelations about Twitter’s administrative tools could end up in a congressional inquiry  Expert commentary provided by Dr. Tom Robinson. Find our guest online: Elliptic website: Elliptic.co  Twitter: @tomrobin