Below is a collection of articles from the last week that are worth reading. The links are mostly market related, but there are some other interesting subjects covered as well. The links are in no particular order. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.
About the ‘flash surge’ in Glencore by Paul Murphy (FTAlphaville)
The trouble with global equity trading and market fragmentation, as demonstrated by an explosive upward leg in Glencore early in Hong Kong trading Monday, catalyzed by a media report. Link. [Free, but login required].
People. Get. A. Grip: Glencore Is Not the Next Lehman by Craig Pirrong (Steeetwise Professor)
Glencore is smaller, less leveraged, has less fragile funding, and is less interconnected to the global financial system than Lehman was; in short, a blow up and the company would look nothing like the “Lehman moment”. Link.
The Labor Market is Strong, But Without a Model for Demographic Turnover, We’re All a Bit Lost and Entry Level Labor is to 2015 what Commodities Were to the early 2000’s by Conor Sen (Tumblr)
New River Investments’ PM Conor Sen does some serious work with FRED (the St. Louis Fed’s compendium of US economic data) to break down big, demographic trends that he contends drove weak headline numbers in last Friday’s Employment Situation Report.
Demographic Turnover Link.
Entry Level Labor as Commodities Link.
Apple Pay Faces Tough Crowd in First Year by Olga Kharif (Bloomberg)
Usage is still far from hitting critical mass, but upcoming upgrades to credit card processing equipment and credt card regulations could increase adoption. Link.
Record ATM Fees Rise Toward $5 by Robin Sidel (WSJ)
ATM Fees are up an average of 21% in the last five years, driven by a 41% decline in usage and banks that are under pressure to cut fees in other parts of their businesses. Link. [Paywall]
Fantasy Sports Employees Bet at Rival Sites Using Inside Information by Jacqueline Williams and Joe Drape (NYT)
Wildly popular and prolifically advertising one-week fantasy sports sites are facing an insider betting scandal based on the release of client data. Link.
Changes in environmental impacts of major crops in the US by Yi Yang and Sangwon Suh (IOP Environmental Letters)
Genetic modification is leading to less pesticide use on US crops like corn and cotton, reducing the toxicity of fresh water tables that are fed by runoff from farms; soybeans have seen a larger impact, mostly due to heavy pesticide use combatting a new aephid species. Link.
Redeterminations, Hedges and Oil & Gas Q415 Outlook by Bob Black (Drilling Info)
Throughout October, banks will be redetermining the creditworthiness of smaller US oil producers that rely on credit lines to maintain production, and the process is setting up to be a brutal one for borrowers. Link.
How Two Guys Lost God and Found $40 Million by Zeke Faux (Bloomberg)
The story of Wall Street’s entry into one of the most controversial forms of small business lending- merchant cash advances. Link.
Can A City Really Run Out Of Room? by Emily Badger (WaPo)
Cities have very few physical constraints on their size; what really holds back additional housing unit growth is politics. Link.
End of the world plan: scientists to nudge asteroid off course as practice for protecting the Earth by Andrew Griffin (The Independent)
The US and the EU are cooperating on a dry-run of what it might take to save the world should an asteroid every stray towards our little blue marble. Link.
Demographics and The Behavior of Interest Rates by Carlo Favero, Arie Gozluklu, and Haoxi Yang (IMF Seminars)
The authors prevent a convincing case that trend in the path of short-term interest rates is persistently impacted by demographics, which they show have been a massive weight on interest rates since about 1980; going forward, that demographic pressure downward should reverse. Link.
Reference Guide to U.S. Repo and Securities Lending Markets by Viktoria Baklanova, Adam Copeland, and Rebecca McCaughrin (NY Fed Staff)
A detailed and comprehensive analysis of how the business of loaning securities works; repo and securities lending enables short selling, position leveraging, and bond market liquidity and is therefore critical to the function of a variety of equity and fixed income markets. Link.
It’s Getting Harder To Move Beyond A Minimum-Wage Job by Ben Casselman (Five Thirty Eight)
A unique analysis of CPS (the survey used to construct the monthly Employment Situation Report) and other survey data that shows minimum wage workers are not moving up and out of the lowest tier of the wage ladder. Link.
The Amazing Inner Lives of Animals by Tim Flannery (NYBooks)
Animal “society” is often just as complex and turbulent as our own, with emotions – or something like them – more relevant than previously thought. Link.
The white man in that photo by Alexa Combs Dieffenback (Griot)
The story of Peter Norman, who stood with a silver metal beside American Sprinters Tommie “The Jet” Smith and John Carlos at the 1968 Olympic Games; despite his athletic performance, his tacit support of the demonstration by the two American athletes led to ostracism by apartheid-supportive Australian Olympic officials. Link.
One of the Hottest Debates in Hedge Fund Land is Starting to Boil Over by Linette Lopez (Business Insider)
With the cost of drug prices suddenly a hot political topic, hedge-fund darling Valeant Pharmaceuticals has come under pressure. Link.
A Former Tesla Employee Weighs in on Elon Musk’s Slam that Apple Hires Only Its Worst Engineers by Jillian D’Onfro (Business Insider)
There’s a spat underway in Silicon Valley as information and speculation both abound regarding Apple’s efforts to build a car; this particular war of words, though, is all about whose employees are best . Link.
The Stealthy, Eric Schmidt-Backed Startup That’s Working to Put Hillary Clinton in the White House by Adam Pasick and Tim Fernholz (Quartz)
President Obama’s campaign was renowned in 2008 and 2012 for its technological advantages over its opponents, and now Democratic nomination seeker Hilary Clinton is getting help on that front from a company that counts Google’s former CEO as one of its investors. Link.
This Man is the Most Dangerous Political Operative in America by Joshua Green (Bloomberg Businessweek)
An in-depth piece on the man who took over Breitbart News in the wake of founder Andrew Breitbart’s death. Link.