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.

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On This Day in History:

Los Angeles Just Proved How Spongy a City Can Be (WIRED)
In response to the extreme rainfall from an atmospheric river, Los Angeles captured 8.6 billion gallons of stormwater using its “sponge city” strategy. This includes transforming impermeable surfaces to permeable ones and expanding spreading grounds to collect water. As urban areas globally face increasing flood risks, LA’s approach utilizes stormwater as a resource rather than a liability, integrating green spaces to enhance water absorption and reduce urban heat. [Link]

Giant Batteries Are Transforming the Way the U.S. Uses Electricity (NYT)
California leads the nation in harnessing solar energy but does have issues as solar output declines at sunset, coinciding with peak electricity demand. To address this, California has dramatically expanded its installation of large-scale batteries, now second only to China in capacity. These batteries store excess solar energy during daylight and release it in the evening, contributing to the state’s power supply and reducing reliance on fossil fuels. The rapid growth of battery technology suggests a future where batteries help stabilize grids and extend the use of renewable energy across the United States. [Link]

Wind and solar are ‘fastest-growing electricity sources in history’ (Carbon Brief)
Renewable energy sources like wind and solar are set to initiate a decline in fossil fuel electricity generation and emissions starting this year, according to Ember’s global electricity review. In 2023, renewables met a record 30% of global electricity demand, despite a drop in hydropower. However, to align with the Paris Agreement’s 1.5°C climate target, renewable energy deployment needs to triple by 2030, a goal that would significantly reduce power sector emissions by nearly half. [Link]

Investments

Stocks Trade for 390 Minutes a Day. Increasingly, Only 10 Matter (Bloomberg)
A substantial portion of S&P 500 trades are now executed in the final 10 minutes of trading. About a third of all trades occur in this brief window, up from 27% in 2021. This concentration of trades at the close is tied to passive funds aligning with daily benchmark prices, but it raises concerns about potential price distortions and the broader impact on market dynamics. [Link]

Buffett Rules Out ‘Eye-Popping’ Returns. But Investors Aren’t Listening. (WSJ)
Warren Buffett has tempered expectations for Berkshire Hathaway’s future performance, noting that the conglomerate is unlikely to achieve “eye-popping” growth due to its size. Despite this, Berkshire’s shares have outperformed the market, with Class B shares increasing by 12% this year. This success comes as Buffett navigates the company without his long-time partner Charlie Munger, and ahead of the annual shareholders’ meeting in Omaha, dubbed “Woodstock for Capitalists.” [Link]

Give This Rich Dude $1 or The Onion Disappears Forever (WIRED)
Jeff Lawson, the co-founder of Twilio, recently acquired the satire website The Onion through his new company, Global Tetrahedron. Despite leaving Twilio after being pressured by activist investors, Lawson’s move into media will focus on The Onion’s independence from traffic-driven revenue models. He introduced a unique funding approach by asking readers for voluntary donations. With plans to explore various business models without a hard paywall, Lawson will try to preserve the essence of satire. [Link]

Health & Wellness

Hacking the immune system could slow ageing — here’s how (Nature)
Stem-cell researcher Carolina Florian witnessed elderly mice rejuvenate after treatment with a drug that modifies the protein organization inside hematopoietic stem cells, which are crucial for the immune system. This treatment, verified across multiple labs, not only improved the mice’s physical attributes but also extended their lifespans by altering the balance of immune cells. These findings, detailed in studies from 2020 and 2022, suggest that targeting immune system aging could broadly rejuvenate bodily functions. While the promise of applying these results to human aging is compelling, researchers proceed cautiously due to the complexities of manipulating the immune system. [Link]

Texas dairy farm worker’s case may be first where bird flu virus spread from mammal to human, scientists say (STAT)
A recent report highlights a potential first case of bird flu (H5N1) transmitting from a mammal to a human in the United States. This unique case involved a Texas man possibly infected through exposure to sick cows on a dairy farm, where no prior animal testing for the virus had occurred. Previously, H5N1 transmission to humans was known only through direct contact with infected birds. Despite the man displaying only mild symptoms, primarily conjunctivitis, this incident worth taking note of. [Link]

Smartphone Bans, Student Outcomes and Mental Health (Norwegian Institute of Public Health)
This study investigates the effects of banning smartphones in Norwegian middle schools. It finds that such bans lead to significant mental health improvements, particularly in reducing psychological issues and bullying among students. Additionally, the bans boost academic performance, especially for girls, by improving GPAs and increasing the likelihood of pursuing an academic track in high school. The study suggests that smartphone bans could be an effective and low-cost policy to boost student outcomes and well-being. [Link]

AstraZeneca withdraws Covid-19 vaccine citing low demand (CNN Business)
AstraZeneca has announced the withdrawal of its Vaxzevria COVID-19 vaccine from the European market due to a large decrease in demand. Despite the vaccine’s substantial role in global vaccination efforts, with over 3 billion doses distributed, it has not been commercially viable since April 2023. The company plans to work with regulators to withdraw the vaccine in other regions where no demand is projected. [Link]

Policy & Law

Swiss Army Knife Goes Blade-Less as Weapons Regulations Tighten (Bloomberg)
Victorinox, known for its Swiss Army Knife, plans to introduce a version without a blade in response to tighter global weapon regulations. CEO Carl Elsener highlighted the company’s adaptation to laws in countries like the UK and Japan, where carrying knives is restricted. The new design will feature tools catered to cyclists among other additions, moving away from the knife’s traditional image. This change addresses increasing legal challenges while maintaining the utility and iconic status of the Swiss Army Knife. [Link]

CFTC Wants to Ban Trades Tied to Elections, Sports and Awards Contests (WSJ)
Regulators are moving to ban derivatives contracts based on outcomes like political elections and sports, aiming to distinguish between gambling and legitimate financial market activities. The Commodity Futures Trading Commission proposed new rules with a 3-2 vote, highlighting concerns about election integrity and the potential for market abuse. While the market for event contracts is relatively small, it has seen significant growth since 2021, prompting this regulatory scrutiny. The proposal, which is still months away from potential enactment, seeks to prohibit bets on elections, sports, and awards within the financial markets, preserving the integrity of both the elections and the financial system. [Link]

Investments

China Is Buying Gold Like There’s No Tomorrow (NYT)
As gold prices soared to record highs, driven largely by geopolitical and economic turmoil, Chinese consumers like Xena Lin have eagerly participated in the market by purchasing small, affordable gold “beans.” With waning confidence in traditional investments like real estate and stocks, and significant purchases by China’s central bank aiming to diversify away from US dollar dependence, Chinese demand has played a crucial role in the sustained high prices of gold. [Link]

Retail investors snap up triple-leveraged US equity ETFs (Financial Times)
In April, retail investors demonstrated a strong appetite for high-risk financial products by directing approximately $5.2 billion into the top 22 leveraged US ETFs. This surge in interest, tracked by VandaTrack, follows previous withdrawals from passive funds amidst record highs in the S&P 500. The uncertainty surrounding US interest rates and new geopolitical tensions spurred investors to engage with these leveraged ETFs, intensifying potential gains and losses. Despite making up a small portion of the $8.9 trillion US ETF market, the growing popularity of these funds, particularly among retail investors, raises concerns about heightened exposure to market volatility and potential losses. [Link]

Economic Trends

VC Investor: ‘Half the White-Collar Staff at Google Probably Does No Real Work’ (WebProNews)
David Ulevitch, an investor at Andreessen Horowitz, criticized the tech industry for harboring too many “irrelevant” and “BS jobs.” In an interview, he supported the notion that many tech companies are overstaffed, echoing the concerns of CEOs who admit to employing workers who contribute little to no meaningful work. Ulevitch highlighted that removing these surplus roles could benefit companies by reducing unnecessary interference in operations. He also pointed out the broader economic implications, noting that such jobs not only misallocate corporate funds but also detract from shareholder profits, impacting pensioners and retirement accounts. [Link]

Pandemic Savings Are Gone: What’s Next for U.S. Consumers? (San Francisco Fed)
Recent data suggest that American households have depleted the excess savings accumulated during the pandemic by March 2024. Initially, these savings surged due to governmental financial support and reduced spending during lockdowns, reaching a peak of $2.1 trillion in August 2021. However, these funds dwindled over the next two and a half years, with households using up about $70 billion monthly. Looking ahead, the future of consumer spending will likely depend on continued employment stability, utilization of non-pandemic savings, and potentially increased consumer debt, despite higher interest rates that make the cost of using credit higher. [Link]

Technology & AI

‘Worst commercial ever’: Apple faces backlash for new iPad ad (Mint)
Apple’s new iPad Pro advertisement, which showcases the device’s creation through the destruction of various creative objects, has sparked significant backlash on social media. The ad, featuring a giant press crushing items like pianos and guitars to form the ultra-thin iPad, was criticized for its negative symbolism. High-profile figures like Hugh Grant and Justine Bateman voiced their disapproval, with Grant commenting on the “destruction of the human experience” and Bateman questioning the impact of tech on the arts. Social media users suggested that a reversed depiction, showing creative items emerging from the iPad, might have been more positively received. [Link]

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