The Breakdown

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” 

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

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.

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

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  

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 Twitter: @LibertyBlitz

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.

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

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 Find our guest online: Website: dlacalle.com Twitter: @dlacalle_IA

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