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.

Baby Boomers

With $15 Left in the Bank, a Baby Boomer Makes Peace With Less by Timothy W. Martin (WSJ)

The aging Boomer cohort is no stranger to debt, a financial strategy which leads many of those later in life to cut it close during times of economic stress. [Link; paywall]

Boomers stuck in a circular unfunded liability they will never break out of… by Deux Et Vingt (Macro Ramblings From the ‘Burbs)

Are low interest rates and high stock prices all the same trade, driven by a massive cohort that is desperately trying to save enough for long retirements? [Link]

Food

Hot, Sticky, & Sweet by Keaton Lamle (Bitter Southerner)

The culture and iconic status of fried dough with a sweet topping in across the South. [Link]

International Relations

How Serious Is the Threat to Global Financial Stability From a Border-Adjustment Tax? by Brad Setser (Council on Foreign Relations)

Regardless of its impact on the domestic economy (which is hotly debated as Senators start to line up against the House’s preferred tax reform proposal), a BAT could have significant repercussions across the global economy purely thanks to its financial markets effects. [Link]

About Face: A History of America’s Curious Relationship With China, From Nixon to Clinton by James H. Mann (Foreign Affairs)

Only Nixon could go to China, and this week marked the anniversary of that remarkable pivot in US foreign policy during the Cold War. [Link]

Strange News

Blackstone CEO throws himself ‘the party of the century’ by Emily Smith (Page Six)

Camels, Mongolian greeters (???), a custom-built temple, Gwen Stefani, and the celebration of Stephen Schwarzman’s birthday party in Florida. [Link]

Howard Stern Sued for Broadcasting Woman’s Conversation With IRS by Eriq Gardner (The Hollywood Reporter)

Does broadcasting 45 minutes of an IRS agent’s call with a taxpayer make for good radio? We doubt it but that didn’t stop Howard Stern from airing it in 2015 and he’s now getting sued. [Link; auto-playing video]

Real Estate: The Good, The Bad, and The Ugly

How Resilient Is the U.S. Housing Market Now? by Andreas Fuster, Eilidh Geddes, Benedict Guttman-Kenney, and Andrew Haughwout (NY Fed Liberty Street Economics)

A comprehensive review of the fundamentals of the housing sector, from LTVs to delinquency at both a national and regional level. [Link]

Mortgage Rates Monday, Feb. 13: Higher; Lower-Credit Borrowers Discouraged by Deborah Kearns (Nerdwallet)

Much of the post-crisis improvement in mortgage applicant FICO scores is due to low-score borrowers not bothering to apply for loans in the first place. [Link]

Are gains in black homeownership history? by Laurie Goodman, Jun Zhu, and Rolf Pendall (Urban Institute)

After years of improvement in the lower rate of homeownership amongst blacks, gains started to reverse in the early 1990s and have dramatically underperformed other cohorts. [Link]

Appconomy

Dopamine Labs slings tools to boost and reduce app addiction by Jonathan Shieber (TechCrunch)

A new start up aims to use neuroscience to offer other app developers the key to hooking users, while trying to prevent PR disaster by also offering tools to reduce appdiction. [Link]

Defaults Slash Returns for Online Loan Investors by Peter Rudegeair (WSJ)

Rising defaults and interest rate increases are dragging down performance for the investment funds that feed capital into many online platform lending players. [Link; paywall]

Now Facebook wants to be your weather app by Michael Grothus (Fast Company)

As if we didn’t spend enough time collectively on Facebook already… [Link]

Elon Musk Is Really Boring by Max Chafkin (Bloomberg)

A traffic jam led Elon Musk to just start digging, thus reinventing an entirely not new form of transportation and earning himself a Blooomberg Businessweek cover. [Link]

Investing

Rob Arnott Says You’ll Be Sorry for Ignoring Smart Beta Warnings by Dani Burger (Bloomberg)

More sturm und drang about the risks of smart beta, which can lead to concentrations and correlation risk for investors. [Link]

Moments Of Truth

Oil Producers Promised Output Cuts. Here’s the Reality. by Brian Wingfield, Samuel Dodge and Hayley Warren (Bloomberg)

Some nice charts on the share of proposed cuts that have actually been met by both OPEC and non-OPEC nations following last fall’s deal. [Link]

It’s a Moment of Truth for U.S. Companies by Oliver Renick (Bloomberg)

With sentiment indices surging, is now the time corporate capex will finally start to accelerate? [Link; auto-playing video]

Congrats!

U.S. flight cancellations, baggage problems fall to historic lows by David Shepardson (Reuters)

In a rare bit of good news, airlines cancelled 1.17% of flights (a new record) and mishandled only 2.7 pieces of baggage per 1000 passengers. [Link]

Politics

The Rise and Fall of a K Street Renegade by Brody Mullins (WSJ)

The massive lobbying success, free-wheeling spending, and tragic downfall of a man that re-wrote the rules for corporations’ efforts to grab Washington’s attention. [Link; registration required]

Le Pen is on course to be France’s next president, fund manager says from AI analysis by Everett Rosenfeld and Nyshka Chandran (CNBC)

Le Pen’s poll numbers haven’t moved much but betting markets and some sort of “AI” (likely code for a series of linear regressions) are moving much more in her favor. [Link; auto-playing video]

GOP May Cap Insurance Tax Break as ACA Repeal Bill Nears by Anna Edney, Billy House and Arit John (Bloomberg)

One of the most interesting possible policy options we’ve seen so far around ACA repeal is the concept of corporate deductions on health care benefits, a source of significant distortion in US health care markets. [Link; auto-playing video]

Stephen Miller Is a ‘True Believer’ Behind Core Trump Policies by Glenn Thrush and Jennifer Steinhauer (NYT)

A profile of one of Trump’s closest – and most extreme – advisors. [Link; soft paywall]

Women

Q&A: Melinda Gates on the World’s Missing Data About Women by Megan Murphy (Bloomberg)

An interview with one of the world’s biggest philanthropists where she focusses on the challenges of improving outcomes for women when there is so little data to assess the lay of the land. Also an interesting look at the Bill and Melinda Gates Foundation more broadly. [Link; auto-playing video]

Have a great Sunday!

In January, the Conference Board’s Leading Indicator for the US economy rose 0.6% MoM versus 0.5% MoM expected.  While the absolute change in the Leading Indicator was certainly positive, we prefer to look at how the Leading Indicator performs relative to the coincident indicator index.  The level of this reading isn’t particularly important but its direction is a very good advance warning of approaching recessions.  As shown in the chart below, the ratio between the Leading and Coincident Indicators tends to drop sharply immediately before and during a recession.  Over the last few months, the ratio has started to turn upwards again after a period of stagnation since the post-recession high print of 1.098 in June 2015.  A new high print, which looks quite likely after the 1.097 level printed this month, would be an indicator that recession isn’t likely in the near term.  With a number of other pieces of economic data suggesting a ramp up in business activity and consumer spending, the Leading/Coincident Indicator ratio adds to the case that a recession in US economic activity is still nowhere close.