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:

Monetary Tightening, Inflation Drivers and Financial Stress (Fed Bank of San Francisco)
In the US and many foreign countries, financial stress increases following a policy rate hike if inflation is supply-driven, but not significantly in demand-driven inflation scenarios. This paper considers the mechanisms behind these observations, considering factors like supply and demand shocks. Robustness checks further confirm these findings, examining impacts on specific financial conditions like loan delinquency rates. The research concludes that monetary policy needs to be nuanced to effectively manage any potential financial stress by taking into account the type of inflation present in the economy. [Link]

Carrefour says it will not sell PepsiCo goods due to price hikes (Reuters)
Carrefour is a major French supermarket chain, and it announced it will stop selling Pepsi products across several countries in Europe citing excessive price hikes. It’ll impact over 9,000 stores and is just one example of retailers pushing back against price hikes amid rising inflation. This isn’t a first for Carrefour either.  The company has contested manufacturers over pricing issues in the past and made it clear to customers when certain products have been subject to “shrinkflation.” [Link]

World food price index ends 2023 some 10% below 2022 levels (Yahoo Finance)
The United Nations Food and Agriculture Organization reported a significant decrease in global food prices last year, with the food price index dropping about 10% from 2022 levels. This decline, marked by a 1.5% drop in December from November, helped alleviate worries over global food inflation. The reduction was driven by factors such as increased production and changes in usage in key commodities like sugar, cereals, and vegetable oils. [Link]

AI & Technology

Important People Are Noticing How Terrible CLEAR Is for Airports (Slate Magazine)
After a jam-packed holiday travel season, it’s easy to look at those crowded TSA lines and rather take a different route. And you can, but there’s a price tag. CLEAR is one answer. Clear Secure (YOU) is a company that we recently highlighted as a 2023 “Triple Play King,” joining five other companies that reported four earnings triple plays last year. If you haven’t read that post, YOU had a tough 2023 despite its earnings success, declining just about 25%. Well, CLEAR offers a way to bypass security lines, and recently became a federal contractor for TSA Pre with its new identity verification system. While it can be a big time saver, many are criticizing the company for selling line-cutting privileges in a government-mandated process. [Link]

Oppenheimer and the resurgence of Blu-ray and DVDs: How to stop your films and music from disappearing (BBC)
Physical media looks to have made an unexpected resurgence, particularly Blu-ray and DVDs, in the streaming era, and Christopher Nolan’s film “Oppenheimer” has been a case study. Despite the dominance of streaming services, the physical release of “Oppenheimer” witnessed a buying frenzy, indicating a continued consumer interest in owning tangible media. This trend reflects concerns over the short-lived and revolving nature of streaming content and a desire for a more controlled and quality viewing experience. [Link]

Car Buyer Hilariously Tricks Chevy AI Bot Into Selling A Tahoe For $1, ‘No Takesies Backsies’ (HotHardware)
ChatGPT and other AI chatbots are being used seemingly everywhere and for everything now. Or at least we’re headed that way. They aren’t perfect yet, though, as Chevrolet’s chatbot was exploited and tricked into agreeing to sell a car for a dollar, “no takesies backsies.” Incidents like this are pretty comical, yes, but they also highlight the risks of unsupervised LLM deployment, including potential data leakage and generating inappropriate responses. We still have a long way to go on AI. [Link]

Jeff Bezos Bets on a Google Challenger Using AI to Try to Upend Internet Search (WSJ)
Perplexity, a startup with funding from former Amazon CEO Jeff Bezos, is looking to make a run at competing with Google. Perplexity uses AI in its search function, which could be a huge change in how people search the internet to get direct answers. The startup has quickly gained attention, attracting investments and a growing user base enthusiastic about new AI applications. Google is stiff competition, but AI is growing and transforming the landscape fast. [Link]

Sports

The Sports-Betting Traders Deciding How Much You Win or Lose (WSJ)
Sports-trading desks use complex algorithms and data analysis to simulate game outcomes and adjust odds in real-time. Throughout any game, it’s pretty impressive how fast odds update based on an infinite number of situational results. FanDuel, for instance, simulates each football play 10,000 times. Traders are positioned all over the map, in different time zones, and around the clock to ensure a smooth operation. These sports-betting platforms generate hundreds of millions of dollars on NFL games in just one weekend slate, before winnings are paid out. Gambling is gambling though, and Miami Dolphin Tyreek Hill’s 78-yard touchdown recently against the Washington Commanders caused FanDuel to lose $1 million. Never forget, though, ultimately the house always wins. [Link]

NFL officiating is broken, according to coaches and executives. Inside a fractured system with no imminent fix (Yahoo Sports)
The NFL season has been plagued by injuries to high-paid starting quarterbacks and other integral players, but even that hasn’t overshadowed how especially bad the officiating has been. Rules have changed over the years and become more focused on player safety, making some calls more subjective and tougher to enforce. The end of the Lions vs Cowboys game last week was especially controversial, leading to a game-altering outcome after what would have been a successful two-point conversion to put the Lions ahead late in the 4th quarter. Will any real changes be made next season? One can only hope, especially with advances in technology used in the NFL. [Link]

Environment

Potential Perturbation of the Ionosphere by Megaconstellations and Corresponding Artificial Re-entry Plasma Dust (Arxiv)
In upcoming decades, satellites are projected to increase by up to one million to form “mega-constellations.” The satellites will frequently re-enter Earth’s atmosphere to be replaced, and they will leave behind conductive particles. The conductive particles from re-entry satellites are already excessive and may grow to a point where a conductive layer surrounds the Earth worldwide. That means satellite re-entries will produce plasma dust with a charge higher than the rest of the magnetosphere. [Link]

I thought most of us were going to die from the climate crisis. I was wrong (The Guardian)
In 2015, scientists predicted global temperatures could rise 6°C by the turn of the century. In those conditions, biomes would change, crops would fail, many would be malnourished, sea levels would rise and drown entire cities and even countries, and the list goes on as each impact would perpetually get more severe. That isn’t a likely case now though. That 6°C figure is projected now to be under 3°C and could reduce further. For example, many underestimate how fast technology evolves, hence the widespread misconception that carbon emissions have increased by more than ten or twenty percent over the last fifteen years. In reality, technological advances have helped us decrease emissions by 20% over that time. Also, never underestimate the power of Mother Nature. Not everything is in the control of humans. [Link]

Trading in Washington

The Unusual Whales Congress Trading Report for 2023 (Unusual Whales)
The Unusual Whales Congress Trading Report for 2023 analyzes stock trades made by U.S. Congress members. It focuses on how their legislative roles might influence their investment decisions, potentially leading to conflicts of interest. The report underscores the necessity for transparency and stricter regulations in the financial activities of politicians, addressing ethical concerns surrounding their access to non-public information and its impact on their trading behaviors. [Link]

Automobiles

The new CARS Rule: What you need to know (Consumer Advice)
The FTC’s new Combating Auto Retail Scams (CARS) Rule, effective July 30, 2024, will make car buying more transparent and fair. Dealers must disclose the full price of a vehicle, including all costs. The rule also gives buyers the right to refuse add-ons like rustproofing or extended warranties and ensures charges are only applied with the buyer’s informed consent. This rule is expected to save car buyers approximately $3.4 billion annually. [Link]

War

‘I’m no longer ashamed of crying’. A volunteer in Russia’s underground support network for Ukrainian refugees tells his story (Novaya Gazeta Europe)
Vyacheslav Korshunov is an activist from Russia, from a part of the country that borders Ukraine. When the war started, refugees began fleeing the country into Russia, and Korshunov decided to step in and help, whether that meant providing suitcases, shelter for the night, food, or other necessities. When it got too dangerous, as authorities would come looking for him, Korshunov moved to Georgia, where he continued to assist refugees. He was often gifted drawings by children he met, one of which he got tattooed as a reminder of his experiences. Korshunov has several stories of his run-ins with police, activism, and connections with refugees. [Link]

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