This week's dramatic market moves are a reminder that economic expansions don't die of natural causes — "they get murdered," as former Fed Chair Ben Bernanke once quipped.  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

August 09, 2024   |   Read Online Brought to you by: "Opportunity often comes disguised in the form of misfortune or temporary defeat." — Napoleon Hill Friday Eye-popping Charts This week's dramatic market moves are a reminder that economic expansions don't die of natural causes — "they get murdered," as former Fed Chair Ben Bernanke once quipped. Usually, it's Bernanke's colleagues who are fingered for the crime — "the Federal Reserve has murdered every one of them," according to the economist Rudi Dornbusch (referring to economic expansions, not Fed chairs). But it's not always the Fed's fault — sometimes it's a mishap in financial markets that spills over into the real economy and pushes us into recession, as was the case with the Savings and Loan debacle, the dotcom bubble and the great financial crisis. On Monday, Japan's Nikkei index had its worst down day since 1987, and it felt like financial markets, discombobulated by the yen carry trade, might break the economy again. It didn't help that last week's jobs data was weak, the AI bubble may be bursting and Middle East tensions are rising. On Thursday, though, the S&P had its best up day since 2022 and it suddenly felt like everything was fine again. Weirdly, the catalyst for the big relief rally appeared to be a better-than-expected weekly jobless claims report — a report that's been thoroughly ignored pretty much every other week it's ever been reported. What's to make of it all? It's hard to say, of course. On the one hand, mishaps in financial markets (like a rapidly unwinding yen carry trade) rarely have real-world consequences — even the 22% one-day crash in 1987 didn't push the US economy into recession. On the other hand, markets do seem significantly riskier than they were just a few weeks ago — Monday was the S&P's second 2%+ down day in the last two weeks after having gone 356 sessions without one.   If nothing else then, it's a reminder that 1) markets are unpredictable — a Vanguard report found that the S&P 500 has historically finished either higher than the highest or lower than the lowest Wall Street forecast 75% of the time and 2) markets can impact the real world simply by spreading narratives — a recent academic study found that "beliefs about the economy spread contagiously" and that these narratives are "a significant cause of the business cycle." So the yen carry trade is probably not going to tip the global economy into recession — but the narratives about it just might. Let's check the charts. Surprising? This undramatic chart was the proximate cause of Thursday's dramatic rally. US weekly initial jobless claims remain — to no one's surprise but the market's — near multi-decade lows. Refusing to land: Last week's economic data and this week's market moves have some saying the US is already in recession (see: the Sahm rule), but the Atlanta Fed's GDP Now model still sees US GDP growing 2.9% in Q3.  Still getting better — and fairer, too: US wages continue to grow and they continue to grow fastest for the lowest-income workers (blue line, above). It's not all good news: The golden age of office perks like free kombucha may be behind us. Less importantly, the biggest raises may be behind us, too. Perception > reality: People's perception of the economy is more a function of their politics than, well, the economy.  Also, a YouGov poll from last year found that "few Americans" were aware that the US economy was growing or that unemployment was unusually low. The most important metric in the history of the world: The Investors Intelligence survey of newsletter writers (!) found that 17% fewer of my esteemed (and overly excitable) colleagues are bullish on stocks compared to just two weeks ago — the largest two-week decline since the 1987 crash. They are probably overreacting: If the economy were about to break, you'd see it in the prices of high-yield bonds. The light blue line above shows that this week's volatility in stock markets has not spilled over into high-yield bonds — which means it's probably not spilling over into the real economy either. Reality matters: One real effect of this week's market turbulence was to make a September Fed rate cut more likely. After that, what the market does is simply a function of what the economy does. If the economy stays out of recession thereafter (the most likely scenario), stock markets should do very well (the red line, above). If not, they won't (the yellow line). Buying when markets are in turmoil: This week's selloff was over too quickly to warrant a "Markets in Turmoil" special on CNBC, but Charlie Biello's table above shows that when markets are perceived to be in turmoil, they don't stay that way for long. Is this week's markets misfortune a similar buying opportunity in disguise? Only time — and the charts — will tell. Have a great weekend, opportunistic readers. — Byron Gilliam Brought to you by: Infinity Hash is the first fully transparent bitcoin mining project that combines the benefits of colocation and cloud mining into one long-term product. With Infinity Hash shares, you can enjoy the stable cash flow of bitcoin mining in a sustainable and convenient new way. Why Infinity Hash is special: Daily rewards: Infinity Hash Shares (IHS) pay out bitcoin mining rewards daily. Keep your shares forever. No locking or vesting, withdraw whenever you want. Fully transparent: Infinity Hash started as a transparent community project from day one. With over a year of transparency reports and full insight, you can verify everything yourself. Hands-off approach: Thanks to Infinity Hash's share model and long-term approach, you'll never have to worry about repair costs or making electricity payments by hand. Ready to try Infinity Hash? Sign up for a dashboard account now. Try Infinity Hash MicroStrategy stock is beating bitcoin — because it buys a lot of bitcoin — Read FTX, Alameda to pay $12.7B in CFTC settlement per court — Read 'Cryptomania' reveals the true cost of SBF's charitable facade [Opinion] — Read UQUID integrates USDT on TRON for seamless public transport payments in Argentina [Sponsored] — Read Radix's gamified onboarding platform RadQuest simplifies Web3 for anyone [Sponsored] — Read Are L1s Converging on the Same Design? Mike dives into Kamala Harris' cabinet, Ripple's settlement with the SEC and the Ethereum community's internal debate. Find out who he thinks might be the next SEC Chair and get his take on whether opportunities in crypto are drying up. Watch or listen to Bell Curve on YouTube, Spotify or Apple. Brought to you by: Renaud Partners is the premier go-to-market advisory firm for early-stage crypto teams. We help founders tell their stories better and build great non-technical teams. We advise teams on their go-to-market strategy, brand positioning, community building, social and PR strategy, and building internal teams. Our clients include some of the top VCs and founders across Solana, Monad, TON, Base, and others. If you're a team looking to expedite your marketing success, let's talk: Connect@RenaudPartners.com. Get started terence @terencechain Ethereum's roadmap is simpler than many think, and most of these can be achieved within the next four years: - Maximize data availability (ex: peerDAS, fullDAS) - Increase censorship resistance (ex: FOCIL) - Reduce trust with out-of-protocol block construction and better slot… x.com/i/web/status/1…   12:47 PM • Aug 9, 2024     186 Likes   38 Retweets   23 Replies Matt @MattFiebach August 5th broke records. It had the highest MEV Boost ETH generation since the merge. Also, the highest Ethereum Protocol capture day since the merge. Entropy Advisors @EntropyAdvisors Almost 5,000 ETH was captured by MEV Boost in one day. Accompanied by over 1,350 ETH in txn fees. This is an ATH since the merge and will be a tough one to beat.  x.com/14886226886292…   2:35 PM • Aug 9, 2024     6 Likes   0 Retweets   0 Replies Ji Kim @_jikim 🚨 An updated draft 1099-DA form just posted on the IRS website, which reflects the final broker regs issued in June. As a refresher, this is the form that "brokers" will start using in 2025 to report digital asset transactions to customers. irs.gov/pub/irs-dft/f1… Initial… x.com/i/web/status/1…   2:18 PM • Aug 9, 2024     29 Likes   12 Retweets   1 Reply   Update your email preferences or unsubscribe here © 2024 Blockworks Daily 133 W 19TH ST New York, New York 10011, United States of America Terms of Service