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.

Drinking

Uh-Oh, Germany Is Rapidly Running Out Of Beer Bottles by Esme Nicholson (NPR)

A European heatwave is driving a surge in beer consumption, meaning the normal circulation of beer bottles from consumer to recycler to bottler and around again is badly disrupted. [Link]

Bribes, Backdoor Deals, and Pay to Play: How Bad Rosé Took Over by Victoria James (Bon Appétit)

The story of low quality rosé’s own payola scandal: marketers paying restaurateurs to put their swill (typically industrial, by product laden product from low-quality inputs) on wine lists. [Link]

Cities

It’s no laughing matter — SF forming Poop Patrol to keep sidewalks clean by Heather Knight (SF Chronicle)

With a large homeless population to deal with, San Francisco faces a serious issue with people relieving themselves in parts of the city’s streets, a concern that has gotten lots of attention in the media. The poop patrol aims to cut down on the smell. [Link]

Economics

Swelling clout of US corporate giants is depressing pay, analysts say by Sam Fleming and Brooke Fox (FT)

New research suggests that increasing market power among large US firms is leading to reduced wage growth; monopsony purchasers of labor. [Link; paywall]

Turkey’s Crisis Exposes the Perils of Strongman Rule by Max Fisher (NYT)

An overview of why autocratic regimes struggle with the trade-off between policies they want to execute and the collateral damage (very frequently, higher inflation). [Link]

How Subscription Business Models are Changing Business and Investing (the Microeconomics of Subscriptions) by Tren Griffin (25iq)

A very comprehensive analysis of how subscription economics work and when they are or are not appropriate for a business to deploy. [Link]

Finance

CLOs Are the New Hedge Funds. Plan Accordingly. by Stephen Gandel (Bloomberg)

An overview of the rise in collateralized loan obligations, securitized pools of bank loans. While the article does not mention this, CLOs performed very well during the last credit crisis; while recent structures are somewhat weaker and concerns are valid, their history is impressive. [Link]

NYSE is putting its own interest ahead of investors’ by David Swensen (FT)

Why the advent of a profit-seeking Big Board may be not so good for the individual investor, or indeed investors of all kinds. [Link; paywall]

Social Media

“He loves me unconditionally, I count my blessings every day. (Channel 4 News/Twitter)

While not a “read”, we had to include this short video about a former drug user and his dog. It’s guaranteed to bring a very big smile to your face. [Link; auto-playing video]

Zuckerberg Doesn’t Care About Publishers? Facebook Denies It. by Glenn Fleishmann (Fortune)

In a meeting with Australian media executives, an employee of the social network claimed CEO Zuckerberg doesn’t care about third-party news organizations and publishers. [Link; soft paywall]

Have a great Sunday!

One factor behind Thursday’s rally in US equities was an apparent stabilization of the situation in Turkey.  Not only had the lira rebounded off of its lows from earlier in the week, but the ETF that tracks Turkish stocks (TUR) also bounced more than 10% off of its lows.  It doesn’t look like much, but the fact that it stopped going down was good enough.

While the lira and TUR bounced, today the lira is back to its losing ways with a decline of 5% versus the dollar.  In addition to that, in local currency terms, Turkish stocks haven’t stopped declining and traded to new lows yesterday.  While the decline isn’t as bad in percentage terms as the dollar adjusted chart above, in order to be confident that Turkey is in fact stabilizing, we would expect to see its stock market stop declining in both dollar-adjusted as well as local currency terms.  Both the chart above and below are updated through Thursday, but in early trading today, Turkish stocks are down in both local and dollar adjusted terms.

Earlier this week, we noted that the New York Fed’s quarterly household debt data showed a collapse in the share of consumers facing collections for bad debts. On Thursday, quarterly data from the Mortgage Bankers’ Association relating to mortgage bankruptcy and delinquency showed similar results. In the charts below we show the share of all loans facing foreclosure, share of loans with new foreclosure proceedings started, delinquent loans, and seriously delinquent loans all as a share of total mortgage loans.

As shown, these indicators of mortgage credit performance are in free-fall and making new lows on a consistent basis. The foreclosure stats are the most impressive. New foreclosures as a share of all loans are the lowest since 1986 per the MBA data, while foreclosures as a share of all loans are the lowest since 2006. Delinquency data isn’t quite as positive but also shows impressive levels of timely payment. By all indications, consumers are in very good financial shape, buoyed by the job market, strong home prices, and higher post-crisis borrower standards.