Long Reads Sunday #97

Happy Sunday from the Hudson Valley

The last two weeks have been some of the most significant in recent American political history. At the moment, they seem far from resolved. I don’t get too deep into the underlying causes (with the exception of sharing a few threads and insights I thought particularly relevant) but instead focus on the markets happening around (and in some ways oblivious too) the social unrest.

But first, the news and podcasts from the week.


This Week’s Top Bitcoin & Crypto News

Two more bits of crypto intrigue that need a little bit more room.

First has to do with a dustup around the Brave browser. Over the weekend, someone noticed that typing in Binance was automatically adding a referral code.

Brendan Eich quickly came to Twitter to say that the issue had been resolved.

BrendanEich @BrendanEich
1/ We made a mistake, we're correcting: Brave default autocompletes verbatim "
binance.us" in address bar to add an affiliate code. We are a Binance affiliate, we refer users via the opt-in trading widget on the new tab page, but autocomplete should not add any code.

If anything, it is a reminder that companies who are offering an alternative to the crap practices of today’s market leaders have to balance the need to make the business model work with the near requirement of being absolutely beyond reproach when it comes to user trust.

Which brings us to our second situation. A year ago, Coinbase raised the hackles of…well, everyone…when it acquired a company that included members of the infamous Hacking Team. On Friday, The Block broke the news that Coinbase was in conversations with the IRS and the DEA about selling blockchain analytics.

Matt Odell summed up basically the entire crypto community’s sentiments:

To make matters worse, this came just after bad customer service led Nassim Nicholas Taleb to rage quite the exchange.


This week on The Breakdown podcast

Monday | The Power and Peril of the 'Bitcoin Fixes This' Meme

  • A look at what role, if any, bitcoin has to play in remaking the world that is being protested around the U.S. (and world) this week.

Tuesday | Bitcoin, Cellphones and the Citizen Tools of Anti-Authoritarianism, Feat. Alex Gladstein

  • A look at the anti-authoritarian technology stack, including where non-state money like bitcoin fits in.

Wednesday | 5 Numbers That Tell the Story of Markets Right Now

  • From the number of U.S. flights from Chinese carriers to S&P 500 growth in the tumultuous year of 1968, these (unexpected) numbers tell the story of today’s markets.

Thursday | The Mirage of the Money Printer: Why the Fed Is More PR Than Policy, Feat. Jeffrey P. Snider

  • An argument that the Fed is actually highly ineffectual due to the presence of the eurodollar shadow-banking system.

Friday | The Biggest Realignment in the US-China Relationship Since Nixon, Feat. Graham Webster

  • A 101-level primer on the history of the U.S.-China relationship, and why today’s bluster represents a fundamental shift. 

Subscribe to The Breakdown


Our Main Theme: Markets In A Time Of Madness

As I mentioned above, there is so much to be said about the underlying causes of these protests that I’m not going to try to get too deep into it here. That said, what’s clear is that while the spark that lit the fuse was the brutal murder of George Floyd, the anger, frustration and fear that have poured forth are about much, much more.

Given the economic roots of (at least part) of this unrest, it becomes interesting to ask how the markets are reacting to it, if at all?

The short answer is: they’re not.

In fact, since March 23rd, we’ve seen the largest 50-day rally in S&P500 history.

Of course, not everyone is convinced of the strength of the rally.

Turns out, this isn’t a historical anomaly. In 1968, for example, markets ended up 7.6% on the year - despite the assassinations of MLK and RFK; the Tet offensive; and more.

Another interesting dimension to this rally is the role of retail. The Davey Day Trade effect is on full display, as traders conditioned on buying against the Fed action rather than value pile in to stocks like the airlines.

Add on top of this Jobs reports numbers that stunned basically everyone and which no one has compellingly explained, and you have a strange strange moment.

For those of us in cryptoworld, Avichal might have said it best.

Catch you next week - NLW

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