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:

New Questions on How a Key Agency Shared Inflation Data (NYT)
The Bureau of Labor Statistics (BLS) is facing scrutiny after revelations that more detailed inflation data was shared with Wall Street “super users” than was previously admitted. An economist at the BLS, in regular contact with finance industry analysts, shared insights about inflation figures, particularly changes in methodology that could affect market-sensitive predictions. This sharing included emails to analysts of major investment banks and hedge funds, detailing technical aspects of inflation data construction. While no early data release was involved, the sharing of methodological insights not yet made public could have provided these analysts with a competitive edge in forecasting. [Link]

The US Postal Service wants to hike stamp prices again in July. Here’s how much you’ll pay (CNN Business)
The US Postal Service is planning another price increase for First-Class “Forever” stamps, proposing to raise the cost from $0.68 to $0.73. The plan seeks to modernize and make USPS more competitive despite its ongoing financial struggles, with projected losses of $6.3 billion in 2024. Since 2019, the price of stamps has increased 36%. Additional changes would see domestic postcard rates rise from $0.53 to $0.56 and international postcard rates increase from $1.55 to $1.65. [Link]

AI & Technology

How Tech Giants Cut Corners to Harvest Data for A.I. (NYT)
In late 2021, OpenAI faced a data shortage from training its AI models and devised a solution by creating a speech recognition tool, Whisper, to transcribe YouTube videos to textual data. Although potentially breaching YouTube’s rules, this fueled the development of GPT-4, one of the world’s most advanced AI models. To keep pace with AI growth and the fierce competition among the world’s largest companies, it’s interesting to note their willingness to explore new methods of data collection, even if they infringe on copyrights. [Link]

The Worst Part of a Wall Street Career May Be Coming to an End (NYT)
For Wall Street, Generative AI could potentially reduce the need for human analysts in investment banking. AI programs which are being integrated into major banks such as Goldman Sachs, Morgan Stanley, and JPMorgan Chase can perform tasks like quickly and efficiently assembling PowerPoint presentations and analyzing financial data. By automating routine tasks traditionally performed by analysts, banks are discussing the possibility of reducing junior analyst hires by up to two-thirds. Investment banking is traditionally reliant on the labor-intensive work of young analysts, but AI could redefine career paths in finance, shifting the focus from grueling entry-level work to more strategic and creative roles. [Link]

AI & Technology

India’s electric rickshaws are leaving EVs in the dust (Rest of World)
In Sonipat, India, a factory is transforming the EV landscape by producing 5,000 three-wheeler EVs, or e-rickshaws, each month for YC Electric, the country’s second-largest manufacturer. These e-rickshaws are part of an EV revolution in India, with sales soaring as the country embraces cleaner transportation alternatives. Despite the lack of major brand recognition compared to four-wheeler and two-wheeler EVs, these e-rickshaws are making significant inroads, driven by local manufacturing and government incentives. The Sonipat plant is a joint venture with Chinese partners providing technology and training. [Link]

E&E News: Geoengineering test launched with salt flecks and secrecy (Politico Pro)
The first outdoor experiment in the US to combat global warming by attempting to increase cloud cover was launched discreetly from a decommissioned aircraft carrier in San Francisco Bay. The test tried to reflect sunlight away from Earth by dispersing microscopic salt particles into the air as part of solar radiation modification research. The experiment does raise questions about the development of climate intervention technologies due to its potential unforeseen impacts on ecosystems and communities. [Link]

Environmental

‘Shortcuts Everywhere’: How Boeing Favored Speed Over Quality (DNyuz)
Recent incidents with Boeing’s 737 Max planes, including malfunctions and a panel blowout, have raised concerns about the aircraft’s production quality. Despite efforts to improve after the fatal crashes in 2018 and 2019, reports and interviews suggest ongoing issues with Boeing’s quality control, including pressure on employees to meet production deadlines, a decline in workforce experience, and a weakened inspection process. The FAA’s ongoing audit and Boeing’s steps toward addressing quality-control issues indicate a critical period for the company as it seeks to regain its reputation and ensure the safety of its aircraft. [Link]
America’s Best Idea, Now Accessible by EV (Heatmap News)
The expansion of EV charging infrastructure is transforming travel to remote national parks across the United States. Previously, accessing these parks with an EV involved navigating sparse and sometimes unreliable charging options, which could turn such trips into logistical challenges. Now, efforts by companies like Tesla to install fast-charging stations near these parks are making it increasingly feasible to explore America’s natural wonders without the carbon footprint associated with traditional vehicles. Not only will this support demand for EV use but it also aligns with conservation goals in the country’s national parks. [Link]

Why Is It So Hard to Build an Airport? (Construction Physics)
The transformation of air travel, particularly with the advent of jet airliners, necessitated the expansion and modernization of airports, a task complicated primarily by the large environmental impact, including noise pollution that affects nearby residents, and the large land requirements that can encroach on valuable ecological areas or necessitate the relocation of existing communities. The historical resistance to airport construction and expansion also reflects broader societal concerns about the pace of technological progress. The solutions for this issue are broad, including quieter turbofan engines, improvements in air traffic control, and more efficient use of existing airport capacities. [Link]

Environmental

Invaders from underground are coming in cicada-geddon. It’s the biggest bug emergence in centuries (AP News)
Trillions of periodical cicadas, unique for their 13 or 17-year emergence cycle, are set to swarm parts of the United States in an event dubbed “cicada-geddon.” This rare occurrence, not seen in such numbers since the early 1800s, will see the insects emerging from the ground to mate and lay eggs before dying. Collectively, their “song” can reach up to 110 decibels, comparable to jet engines. This year’s double emergence of two broods, last seen together in 1803, promises an unparalleled display across multiple states. [Link]

In Texas, ex-oil and gas workers champion geothermal energy as a replacement for fossil-fueled power plants (The Texas Tribune)
In 2021, Sage Geosystems, a startup led by former Shell employees, targeted a deserted well in Texas for a geothermal energy project, aiming to generate power from the Earth’s heat. The technique used mirrors fracking, involving deep drilling and water injection to crack rocks and release pressurized water, spinning turbines to produce electricity. Geothermal energy, unlike solar and wind, offers a continuous power source, independent of weather conditions. These projects embody the transition of oil and gas expertise to renewable energy sources, aiming to expand geothermal capacity with the support of Inflation Reduction Act tax credits and potentially transform energy production on a global scale. [Link]  

Sports

Bill Murray’s Son Designed UConn’s Offense. It’s No Joke. (WSJ)
UConn dominated March Madness thanks to the team’s dynamic offense, which is largely credited to assistant coach Luke Murray, son of comedy legend Bill Murray. Perhaps one of the most shocking stats was the team’s 30-0 scoring run against Illinois in the Elite Eight. The closest game UConn played in the tournament leading up to its championship matchup against Purdue, which the Huskies still won by 15, was still a 14-point margin against Alabama in the Final Four with an average margin of 23 points throughout the tournament. The team’s total point differential of +140 is the greatest in tournament history and they join UCLA from the 1960s as the only teams to win back-to-back championships by 15+ points. To make a long story short, that’s a lot of scoring. The key to Murray’s success lies in observation, taking ideas from basketball worldwide. It has proven to be effective enough to make UConn the most efficient offense in the nation after being ranked 27th in the category before Murray’s hiring in 2020. [Link]

TV Ratings: Men’s NCAA Final Falls Short of Women’s Title Game for First Time (The Hollywood Reporter)
While UConn might’ve dominated on the men’s side of March Madness, attracting a slight increase in viewership from last year, it was the women who shined this year. In fact, the men’s final attracted fewer viewers than the women’s championship for the first time, with the women’s final between South Carolina and Iowa garnering a record 18.87 million viewers. Of course, all eyes were on Iowa’s Caitlin Clark against Dawn Staley’s undefeated South Carolina team who ultimately thanked Clark’s contributions to the women’s game after defeating Iowa. Notably, that championship game also attracted more eyes than any basketball game, including NBA games, in the last five years! [Link]

Steve Cohen says a 4-day work week is coming in part because of AI (CNBC)
Steve Cohen, billionaire hedge fund manager and owner of the New York Mets, says that the four-day workweek will eventually become a reality as AI becomes more prevalent and productivity levels on Fridays are already low. Assuming the shortened week is coming as Cohen expects, that means people will have more leisure time and lead to more golf rounds and higher levels of interest in the sport. The sport already saw a surge in interest during the pandemic, so it is obvious that interest is there. The prospect of a four-day workweek was enough evidence for Cohen to invest in the golf startup league TGL as well as a possible future investment in the PGA Tour. [Link]

Investments

Costco selling as much as $200 million in gold bars monthly, Wells Fargo estimates (CNBC)
Gold sales at Costco started in late summer of 2023 and have quickly gained momentum, evidenced by rapid online sell-outs and an increasing volume of related Reddit discussions. The retailer sells one-ounce, nearly pure 24-karat gold bars, roughly 2% above the spot price, making them an attractive investment amid rising inflation and uncertainty over the economy. Since the beginning of the year, gold is up more than 13%. [Link]

Fidelity to Charge $100 Servicing Fee on Some ETFs (The Wealth Advisor)
Starting on June 3rd, Fidelity is set to impose a new service charge on ETFs from a select group of asset managers, including Simplify Asset Management, AXS Investments, and others. The fee targets ETFs from firms not engaged in a specific maintenance agreement with Fidelity to support the technology and services necessary for a secure investor experience (pay to play anyone?). Meanwhile, the broader ETF market continues to grow, with US-listed ETFs holding $8.9 trillion in assets as of the end of March. Notably, ETFs from State Street, Vanguard, and BlackRock saw significant inflows last month, driven by rising interest in domestic equity as the S&P 500 index climbed. [Link]

Sotheby’s Rare Bond to Be Backed by Rembrandt, Warhol Art (BNN Bloomberg)
Sotheby’s Financial Services is preparing to issue a unique $500 million bond backed by art from renowned artists like Rembrandt van Rijn, Andy Warhol, Pablo Picasso, Jean-Michel Basquiat, and Frida Kahlo. The bond involves 89 personal loans secured against artworks and collectibles valued at approximately $2.85 billion. This securitization includes a mix of contemporary art and Old Master paintings, with contemporary pieces accounting for 43% of the total estimated value. Sotheby’s is leveraging its extensive experience in art lending amid a broader market trend of embracing niche asset-backed securities. [Link]

Taxes

Bad tax advice is multiplying on TikTok (Washington Post)
TikTok has become a hotbed for aggressive tax advice, with influencers suggesting questionable strategies to lower tax liabilities. CPA Krystal Todd, with a significant following on TikTok and Instagram, stresses her videos are educational, not advice. Yet, the IRS warns many online tax tips, such as hiring children as employees or deducting personal vacations as business expenses, could lead to fines. Of course, TikTok is a very influential platform, so there is a concern about the impact of such advice on taxpayers’ decisions and potential legal implications. [Link]

Doing Your Taxes Sucks. The IRS Is Fixing That. (The New Republic)
With the April 15th deadline tomorrow, the IRS has been piloting its new Direct File option this year in 12 states for individuals with W2 income, Social Security benefits, unemployment insurance, and interest income below $1,500. Direct File is part of the IRS’s initiative under the Inflation Reduction Act that aims to simplify and economize tax filing. It allows eligible taxpayers to file directly with the IRS, saving them time and money, taking about 30 minutes to complete. So far, results have been positive and could be the start of the IRS expanding options like this in the future. [Link]

College Admissions

Why US Colleges Are Reviving Standardized Tests (Bloomberg)
The pandemic disrupted standardized testing across the US, leading many colleges, including Ivy League schools, to adopt test-optional policies. Recently, however, institutions like Yale, Dartmouth, Brown, and MIT have reinstated mandatory testing requirements. This reversal is partly in response to the Supreme Court’s decision against race-based admissions, pushing colleges to seek new metrics for evaluating applicants. Critics argue that these tests favor wealthier students who can afford extensive preparation. In contrast, some colleges continue to explore alternative admissions criteria to promote equity. [Link]

Baltimore Bridge Collapse

A CIA mission, Howard Hughes and espionage: The history of Baltimore bridge’s crane (Axios)
The enormous crane involved in clearing the collapsed Baltimore bridge, known as Chesapeake 1000 or “Chessy,” has a dramatic history tied to a covert Cold War CIA operation. Originally used to assist in constructing a massive ship for a US spy mission in 1968, Chessy was part of Project AZORIAN to recover a sunken Soviet submarine and its secrets from the Pacific Ocean. Despite the ambitious nature of the mission and partial recovery of the submarine, the operation was exposed in 1975 due to leaked documents. Decades later, Chessy is still operational, now aiding in the cleanup efforts of the recent bridge collapse. [Link]

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