Sep 25, 2022
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
While you’re here, join Bespoke Premium with a 30-day trial!
Russia
Russia’s underperforming military capability may be key to its downfall by Jack Watling (The Guardian)
A comprehensive framework for understanding why the much larger, more expensive, and ostensibly more capable Russian military is underperforming so dramatically versus Ukraine. [Link]
Russia to conscript 1.2 million people (Meduza)
Dissident Russian outlet Meduza reports that the “partial mobilization” announced this week plans to intake more than 1mm soldiers, though the Russian Defense Ministry later denied the reporting. [Link]
‘They Are Watching’: Inside Russia’s Vast Surveillance State by Paul Mozur, Adam Satariano, Aaron Krolik and Aliza Aufrichtig (NYT)
A massive leak of detailed documents casts a light on the bureaucracy that manages the Russian populace’s social media censorship. [Link; soft paywall]
Commuting
U.S. Return-to-Office Rates Hit Pandemic High as More Employers Get Tougher by Peter Grant (WSJ)
Office use for a sample of 10 major metros was back to just below half of 2020 levels, the highest level since late-March 2020 as managers demand more time at the office and the population moves on from the pandemic. [Link; paywall]
Can You Actually Ditch Your Car for an E-Bike? Maybe by Brigid Mander (WSJ)
Surging e-bike adoption is helping more Americans go from car to bike, putting more range in the pedals of commuters and errand-runners alike. [Link; paywall]
Real Estate
Potential home buyers and sellers continue to hesitate, prices continue to soften (August 2022 Market Report) (Zillow)
Zillow’s data shows the largest monthly price drop since 2011 as affordability concerns amidst high mortgage rates hamper demand and drive up time on market. [Link]
Central Banking
Does the UK need an emergency rate hike? by Louis Ashworth (FTAV)
Collapsing sterling and soaring rates has the market wondering if the BoE can or maybe needs to raise rates on an emergency basis. [Link; reservation required]
The Fed Is Getting Even Tougher on Inflation. Here’s What To Watch First. by Christopher Leonard (Politico)
A long-form thesis arguing that the Federal Reserve actually faces a much tougher set of trade-offs than the ones faced by the famed Volcker Fed which today’s FOMC is trying to emulate. [Link]
Social Media
‘The Chaos Machine’ author on celebrity hacks and how social media threatens IT security by Eoin Higgins (IT Brew)
An interview of a Max Fisher, NYT reporter and author of a book that delves into the darkest recesses of social media business models as well as the catastrophic externalities that support them. [Link]
Supply Chains
Ford’s Latest Supply-Chain Snarl: Not Enough Blue Oval Badges by Nora Eckert (WSJ)
Even the iconic Blue Oval badges which denote a Ford have disappeared from inventories, a relatively simple and straightforward part that has still run into a wall amidst disruptions to value chains throughout the auto industry. [Link; paywall]
‘Crippling’ Energy Bills Force Europe’s Factories to Go Dark by Liz Alderman (NYT)
It’s hard to melt glass to manufacture tableware when you don’t have enough natural gas, or run steel blast furnaces, smelt aluminum, or produce zinc. [Link; soft paywall]
High Natural-Gas Prices Push European Manufacturers to Shift to the U.S. by David Uberti (WSJ)
As factories and smelters shut down in Europe due to energy constraints, companies are looking to the US with cheap and reliable energy supplies being the primary attraction. [Link; paywall]
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Have a great weekend!
Sep 23, 2022
This week’s Bespoke Report newsletter is now available for members.
There’s no sign of a let-up in Fed tightening plans this week, leaving investors to ask the question: how much further does the Fed have to hike before the economy breaks? Yet another FOMC press conference with novel arguments for hawkishness leads to the inescapable conclusion that the FOMC will keep tightening until something breaks. So far nothing has, though catastrophic price action in interest rates, a disastrous week for UK assets on the back of a new fiscal package, and a ripping US dollar are all the sorts of events that would lead to a breakdown in the financial system that might cause the Fed to hold off. We discuss all the implications for markets as well as sector-level analysis of the US and Europe, a look at seasonality, a review of falling inflation in the Great White North, comprehensive analysis of US economic data from this week, and much more in this week’s Bespoke Report.
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Sep 21, 2022
Searching for ways to better understand the fixed income space or looking for actionable ideas in this asset class? Bespoke’s Fixed Income Weekly provides an update on rates and credit every Wednesday. We start off with a fresh piece of analysis driven by what’s in the headlines or driving the market in a given week. We then provide charts of how US Treasury futures and rates are trading, before moving on to a summary of recent fixed income ETF performance, short-term interest rates including money market funds, and a trade idea. We summarize changes and recent developments for a variety of yield curves (UST, bund, Eurodollar, US breakeven inflation and Bespoke’s Global Yield Curve) before finishing with a review of recent UST yield curve changes, spread changes for major credit products and international bonds, and 1 year return profiles for a cross section of the fixed income world.
In this week’s report we highlight the extreme cheapness of the 20y sector of the yield curve.
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Sep 18, 2022
Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
While you’re here, join Bespoke Premium with a 30-day trial!
Wealth
U.S. household wealth suffers record drop in second quarter by Dan Burns (NASDAQ/Reuters)
Rising interest rates and falling asset prices are unwinding many of the huge wealth gains from the pandemic period when soaring prices sent US net worth above $150trn. [Link]
Gulf States, Rich From Oil, Spread Influence With Financial Lifelines by Chelsey Dulaney and Rory Jones (WSJ)
Oil-rich economies are seeing a massive inflow of cash amidst high energy prices. Some are using that cash to support other countries that are reeling under balance of payments stress and natural disaster crises. [Link; paywall]
Electric Vehicles
Tesla Shifts Battery Strategy as It Seeks U.S. Tax Credits by Rebecca Elliott and Mike Colias (WSJ)
The passage of the Inflation Reduction Act earlier this year is already driving companies to re-think their approach to offshoring and supply chain design as the world’s largest EV maker may be switching battery production from Germany to the US. [Link; paywall]
Ford Reveals New EV-Selling Rules to Dealers by Nora Eckert (WSJ)
The Big Blue Oval is rolling out a new approach to selling EVs which will require no-haggle prices. New infrastructure for charging will also be a must. [Link; paywall]
Surgical Science
I Wish I Was a Little Bit Taller by Chris Gayomali (GQ)
Men who want to be a little bit taller are undertaking a dangerous surgery designed to lengthen their legs and add a few inches via broken femurs, titanium rods, and a lot of pain. [Link]
An ACL Tear That Heals Itself? by Aylin Woodward (WSJ)
Imagine your body re-growing its own ACL? A new generation of biologic treatments that create a scaffold for the ligament to grow on is being used to replace the injured tissue. [Link; paywall]
Scarcity & Abundance
Low-Paid Workers Face Worst-Ever Financial Crisis, Study Finds by Alan Jones (Press Association/Bloomberg)
The Living Wage Foundation surveyed low-wage workers and discovered more than half have used a food bank over the past year with almost as many regularly skipping meals. [Link; soft paywall]
From Shortage to Glut: Scotts Miracle-Gro Is Buried in Fertilizer by Thomas Gryta (WSJ)
The huge boom in consumer demand during the pandemic convinced goods producers and importers to ramp up their inventories. Now, that demand isn’t appearing to the same degree that was expected, a glut of inventories and over-production remains. [Link; soft paywall]
Global Food Supply Faces Fresh Turmoil With Rice Set to Climb by Patpicha Tanakasempipat, Pratik Parija, and Mai Ngoc Chau (Bloomberg)
Export controls in India are expected to drive up the price of rice globally. Global production has already been curtailed by weather and the shock of other crop prices soaring earlier this year. [Link; soft paywall]
Ukraine
Ukraine Pulled Off a Masterstroke by Phillips Payson O’Brien (The Atlantic)
The offensive that let Ukraine retake large swathes of Kharkiv Oblast in a dramatic breakout was part of a broader strategic feint which has played out over the entire summer. [Link; soft paywall]
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Have a great weekend!
