The Breakdown

Today’s edition of The Breakdown is an extended version of the Brief, this time covering five topics. New Jobless claims - sticking stubbornly at ~1.5 million new claims per week, despite economist expectations  The “whack-a-mole” economy - Former Treasury Secretary Lawrence Summers predicts as much as 30% of the economy may need to close to get COVID-19 under control PlusToken scam pressure on BTC price: Has scam selling suppressed the price of bitcoin since early last year?  Biggest ever bitcoin option expiry; more than $1 billion in notational value BTC options are set to expire tomorrow, Friday, June 26 Apple’s UX privacy triumph: Users will have to opt-in to allow apps to track them across other apps as well 

The economy is nothing if not confounding right now.  Across every domain, from real estate to oil to retail, there are bull signals and bear signals.  In this episode, NLW looks at those signals in the following areas: Markets - strong stock recovery vs. growth in cash deposits Employment - growth in jobs vs. persistent continuing jobless claims Retail - growth in foot traffic vs. demand destruction Oil - growth in demand (but not in economically productive diesel) Real estate - surge in mortgage applications vs. worst home sales since 2010 Dollar - declining confidence vs. there is no alternative  COVID-19 - reduced death rates in the U.S. vs. growing caseload What’s the answer? Is this just a narrative mirage recovery? Listen and find out.

Today on the Brief: PayPal and Venmo reportedly adding crypto buying and selling Trump executive order temporarily suspends H1-B visa program Continued growth in bitcoin derivatives Our main conversation: Tracy Shuchart is an oil- and commodities-focused trader in the private equity space known for her wide-ranging insights on financial Twitter (FinTwit).  In this conversation, she and NLW discuss: Why the shale revolution of the last 10 years shifted the power balance in global energy among the United States, Russia and Saudi Arabia How easy money in the wake of the Great Financial Crisis enabled the shale revolution as much as new technology Why after the 2014-2016 oil crash it was inexperienced private equity firms that picked up where banks left off with shale How a growing focus on dividends and cutting costs was creating structural problems for shale even before the COVID-19 crisis How COVID-19 coincided with a contentious negotiation between Saudi Arabia and Russia that ultimately sent prices to less than $0    Find our guest online: Twitter: @chigrl On the web: chigrl.com

Today on the Brief: New Federal Reserve research suggests reaction to Facebook’s Libra basket approach was overblown Italian Banking Association pushing to test a digital euro U.S. housing has worst month since 2010 Our main conversation: Earlier this month, Messari hosted the Mainnet virtual summit. At that event, NLW moderated a session called “Macro Investors Sound Off!” featuring BlockTower Capital’s Ari Paul, Blockchain Capital’s Spencer Bogart and Arca’s David Nage.  The discussion included: The evolution of the Fed put and how it shapes the markets  How the collision of Bitcoin’s halving and the Fed’s reaction to COVID-19 created a powerful narrative moment Why the “Money Printer Go BRR” meme was so effective Why the Paul Tudor Jones letter was hugely influential within family offices Why these investors expect to see some significant announcements around bitcoin exposure from traditional investors in the months to come  Find our guests online: Ari Paul: @AriDavidPaul Spencer Bogart: @CremeDeLaCrypto David Nage: @DavidJNage Watch the rest of Messari’s Mainnet 2020 sessions.

A reading of two pieces How I Learned to Stop Worrying and Love the Money Printer by Jill Carlson | CoinDesk + Fight the Fed Jesse Felder | The Felder Report 

The big narrative in financial media for the last few weeks has been the insurgent Robinhood rally, led by the AC/DC-blaring Pied Piper Dave Portnoy, owner of Davey Day Trader Global Global (DDTG Global).  As people try to make sense of the strange retail trading phenomenon, one perspective is the participants (average age of 31 on Robinhood) are reacting to a market that has left them behind. In this view, they are assaulting the market with otherwise outrageous and ludicrous strategies because, otherwise, how will they get their piece?  This week’s Breakdown Weekly Recap looks at this in the context of some surprising (and frankly depressing) stats about the millennial generation’s current wealth, as compared to where boomers were at the same time in their careers.   

Today on the Brief: FTX lists two Compound tokens Reddit partners with Ethereum Foundation on Layer 2 scaling Black-In Freedom Festival reimagines Juneteenth Our main topic:  Dr. Vikram Mansharamani is a lecturer at Harvard and author of “Boombustology: Spotting Financial Bubbles Before They Burst” as well as the just released “Think for Yourself: Restoring Common Sense in an Age of Experts and Artificial Intelligence.”  In this wide-ranging conversation, he and NLW discuss: Why our relationship with experts and expertise is leading us astray How COVID-19 shows the downside of both over-reliance on, and complete rejection of, experts  How the economic crisis surrounding COVID-19 is bursting bubbles and moving us from a period defined by deflation to one defined by inflation Why “monetary debasement is here to stay” Why the U.S.-China relationship is the key backdrop for understanding the next 10 years of global economic reality  Why inequality threatens the fabric of our economy and our society, and what might be done about it Find our guest online: Twitter: @mansharamani Website: Vikram Mansharamani | “THINK FOR YOURSELF”

Today on the Brief:  Powell says private companies shouldn’t be involved in Central Bank Digital Currencies According to former NSA head John Bolton, Trump told Mnuchin to go after Bitcoin Interest around Compound driving speculation around a DeFi-driven bull run  Our main topic:  This week’s U.S. jobless report brought bad news. Whereas economists had expected new claims to fall to 1.29 million from 1.57 million the week before, claims fell just 58,000 to 1.51 million. Continuing claims fared even worse. Economists predicted these claims would fall 600,000+ to 19.9 million. Instead, they fell a tenth of that - 62,000 - to leave total continuing claims at 20.5 million. In this episode, NLW breaks down what we can learn from these numbers when they’re combined with the previously released May jobs report.

On the Brief: Big tech vs. the American political right and left Why TikTok users are pretending to love China for clout Decentralizing venture capital  Our main conversation: The Crypto Dog is one of crypto Twitter’s best known characters. In this conversation, he and NLW discuss: Mining bitcoin in 2011 The difficulty of hodling across a decade The emergence of the crypto trader in the Ethereum era Trader agnosticism  Pseudo-anonymity and social media  Developing the character behind the avatar  Global nomadism and the acceleration of “work from anywhere”  The vibe and feel of Hong Kong today Find our guest online:Twitter: @TheCryptoDog

Today on The Brief: An unexpectedly good retail sales report drives market confidence  Are we in for a second wave of white-collar layoffs?  The latest rumblings in central bank digital currencies Our main conversation: Jesse Felder is an independent financial analyst and one of the best financial curators on Twitter.  In this wide ranging conversation, he and NLW discuss: The Robinhood rally and what makes it both alike and different from previous manias  The illusion of American recovery and the disconnect between markets and fundamentals  The Federal Reserve’s role in increasing economic inequality  Why the dollar is significantly overvalued relative to other currencies  Why financial assets could be poised for a rough decade  Find our guest online: Twitter: @jessefelder Website: The Felder Report