Ten31 Timestamp 913,425
Depending on the concentration of tinfoil in your hat, President Trump’s recent shakeup of the Bureau of Labor Statistics was either an ineffective tantrum or a smashing success, as the latest jobs data for August looked particularly bleak on almost every metric, including a revision that makes July the first month with negative sequential job creation since the depths of COVID. On one hand, we have to imagine this wasn’t the headline the President was looking for after canning the prior BLS head for ostensibly “RIGGING” jobs figures to make Republicans “look bad”; on the other, this is almost undoubtedly the print the Fed needed to see to lock in a rate cut at this month’s FOMC meeting, and many commentators are now suggesting two cuts may be in play. The market briefly pumped on this readthrough before everyone remembered what typically happens when the Fed embarks on a sustained rate-cut cycle, though with recessions functionally outlawed for the past 16 years and nondiscretionary federal spending now firmly in excess of tax receipts (and going higher every day the boomer cohort ages into Social Security / Medicare), we suspect creative policies to manage asset prices (and thus capital gains taxes and high-end consumer spending) will remain top of mind in Washington. To that point, the DOJ pushed the White House’s attack on Fed Governor Lisa Cook into another gear this week, while Treasury Secretary Scott Bessent escalated his attacks on the Fed’s “mission creep” in a Wall Street Journal op-ed. Gold’s latest all-time high suggests investors are putting all these pieces together, and we can think of at least one other asset that should soon follow.
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Selected Portfolio News
OpenSecret launched Maple proxy, a new API allowing app developers to leverage calls to the top LLMs without sacrificing user privacy:
Strike added improved fee tiers for various international markets:
Debifi launched the public beta for its bitcoin-collateralized virtual cards:
Media
Strike and its founder Jack Mallers were heavily featured in an in-depth profile of NFL star Saquon Barkley, who has become an outspoken bitcoin advocate over the past several years.
Market Updates
It was a brutal week for the employment picture, as ADP’s latest jobs data for August came in softer than expected and the more important non-farms payroll report from the new and improved BLS was also dramatically below expectations.
The headline unemployment rate for August ticked up to 4.3%, while the broader U6 unemployment rate (which captures labor force exits and underemployment) rose to its highest level since 2021.
Perhaps more notably, all gains for the month were driven by part-time work, and the NFP figure for July was revised down to a loss of 13,000 jobs, the first monthly jobs decline since spring 2020.
Meanwhile, the latest ISM Manufacturing PMI readout was similarly discouraging, showing the sixth consecutive month of contraction, though the Services PMI printed the strongest figure in six months on much better new orders (offset by a 16-year low in the order backlog).
The Wall Street Journal’s in-house Fed Whisperer (mouthpiece?) quickly indicated that the week’s data should lock in at least one Fed Funds rate cut at the central bank’s upcoming September meeting, with chatter ramping up for a potential 50bps cut.
In response to all this, the US 10-year Treasury yield plunged to just over 4%, its lowest level since the knee-jerk drop on Liberation Day.
Mortgage rates also saw their largest one-day decline in a year, with the 30-year fixed reaching 6.29%, down from over 7% just a couple months ago.
This piece was likely welcome news to the administration, as Treasury Secretary Scott Bessent floated the idea of rolling out new measures this fall to tackle the “national housing emergency” that has priced many Americans out of home ownership.
Elsewhere in creative ideas to address the country’s various fiscal challenges, Bessent penned an op-ed in the Wall Street Journal flatly criticizing the Fed’s “mission creep” that has, in the Treasury Secretary’s view, “created the perception that monetary policy is being used to accommodate fiscal needs” (can’t imagine where anyone would get that idea).
While this is on par with many of Bessent’s recent comments and insinuations, we would note that it’s interesting to see the Treasury Secretary critique the Fed for massaging interest rates and working overtime to stimulate nominal growth, as that appears to be a pretty good description of Bessent’s playbook.
As the Treasury Secretary publicly scolded the Fed, the Department of Justice further advanced the White House’s crusade against Lisa Cook, opening a criminal investigation into the Fed Governor’s alleged fraudulent mortgage activity.
Overseas, the boys cut Trump out of the group chat, as Chinese President Xi Jinping hosted Vladimir Putin, Narendra Modi, and even Kim Jong Un for various power-projecting festivities without inviting the President.
Trump, for his part, suggested Europe must put more pressure on China, as both sides look to be moving toward some kind of strategic decoupling.
Regulatory Update
The Small Business Administration officially ordered lenders to end the practice of “debanking” that has historically been used to limit financial access for companies in bitcoin and other politically disfavored industries, the latest move in the administration’s rollback of “Operation Chokepoint 2.0.”
Noteworthy
As rumored a few weeks ago, Stripe officially launched the stablecoin-focused “Tempo” blockchain in collaboration with Paradigm, joining similar recent announcements from Circle and Google.
While we strongly doubt the long-term viability of these projects for various reasons, we’d note once again the challenge that announcements like this pose to the “utility” value accrual narrative for altcoins.
As large corporations launch their own proprietary stablecoin projects, leading stablecoin issuer Tether is reportedly evaluating investments in gold miners.
Reports this week suggested Nasdaq will add new rules and disclosure requirements for “digital asset treasury companies,” in some cases requiring shareholder votes for new capital raises.
In related news, leading bitcoin treasury company Strategy was not included as a new addition in this quarter’s update of the S&P500 constituent list, a long-awaited catalyst for supporters of the stock. This was the company’s first quarter of eligibility for inclusion.
Travel
Bitcoin Park Custody & Treasury Summit, Sep 17-18
Bitcoin Park Imagine IF Summit, Sep 19-20
Portfolio Company Retreat, early October