Welcome to Bespoke Brunch Reads, our Saturday morning summary of interesting things we’re reading this week. The links are mostly market related, but there will be 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.

Huge Valeant Stake Exposes Rift at Sequoia Fund by James Stewart [Link]

IBM is trying to solve all of computing’s scaling issues with 5D electronic blood by Sebastian Anthony (Ars Technica)

IBM is now developing electro-chemical ‘blood’ for computing to help power and cool computer chips. [Link]

Living and Dying on Airbnb by Zak Stone (Medium)

A tragic recounting of a father’s death while staying at an AirBnB location forces readers to consider the implications of Silicon Valley’s “build first, test later” imperative and the force technology has in removing safety for consumers in all manner of activities. [Link; warning, piece contains a graphic description of the death of the author’s father]

The Secret to Making 2000% in Stocks Overnight, the Anavex story. by Jean Fonteneau (Medium)

A step-by-step walk-through of a biotech promotion scheme that has extracted tens of millions of dollars from retail investors via spam and third-party financing agreements. [Link]

Colleges Flex Lobbying Muscle by Brody Mullins, Douglas Belkin, and Andrea Fuller (WSJ)

Inside the close relationship between the higher education system and legislators, who have repeatedly balked at efforts to introduce transparency and quality-focused regulation. [Link, paywall]

Takeover Loans Have Few Takers on Wall Street by Matt Wirz and Liz Hoffman (WSJ)

Loans floated to corporate acquirers financing M&A have found few bids in the secondary market; this is one area of credit that has not recovered to the same degree as the investment grade or high yield bond markets since spreads peaked earlier this fall. [Link, paywall]

This is your paycheck at full employment…maybe by Jaren Bernstein (On The Economy)

A model for the future path of wage growth, as predicted by several different measures of labor market slack. [Link]

Money-Fund Flows Are a Risk Meter by Simon Constable (WSJ)

New research suggests that flows into money market funds are predictive of the path of equity markets; flows in tend to signal bumpy times ahead for stocks. [Link, paywall]

Hedge-fund prodigy takes a $300 million hit by Rob Copeland (MarketWatch)

One of acclaimed investor Julian Robertson’s so-called Tiger Cubs (funds run by his former employees or funded via his sprawling hedge fund business) has taken a massive hit on the back of the collapse in Valeant’s shares. [Link]

Wall Street Braces For Lower Bonuses (Fox Business)

Bonuses are seen dropping this year with volatility and unprofitable businesses weighing on both the buy and sell side. [Link]

European Banks’ Dollar Swap Costs Jump to Highest Since 2012 by Lucy Meakin (Bloomberg)

The cost of locking in dollar funding for the next year versus EUR (and a variety of other currencies) is steeply negative, indicating a material shortage of USD in global lending markets. [Link]

The Strange, True Story of How a Chairman at McKinsey Made Millions of Dollars off His Maid by Nilita Vachani (The Nation)

In a heartbreaking twist, the maid whose identity was used to funnel millions through the accounts of Anil Kumar (a co-conspirator of Raj Rajaratnam’s record-setting insider trading case) now lives in poverty in her home country of India. [Link]

Rich Formula: Math And Computer Wizards Now Billionaires Thanks To Quant Trading Secrets by Nathan Vardi (Forbes)

Inside the secretive, intense, and profoundly wealthy world of quantitative hedge funds, where some of the brightest mathematical minds on the planet labor to devise algorithms and quantitative techniques that justify an impressive 3 and 30, 50% more than traditional hedge funds have charged. [Link]

Z Machine Sets Unexpected Earth Temperature Record (NASA APOD Astronomy Picture of the Day)

Back in 2006, scientists at Scandia National Laboratories accidentally generated the hottest human-produced temperature ever recorded; that 2 billion Kelvin reading exceeds the temperatures at the core of stars, and was enough energy to exceed world electricity output by 80 times. [Link]

Five Strange Things That Have Been Happening in Financial Market by Tracy Alloway (Bloomberg Markets)

Esoteric corners of the financial markets have been doing things that market participants haven’t expected, and have a hard time understanding. [Link]

The euro was pointless by Matt Klein (FT Alphaville)

Looking at the performance of countries that maybe ought to share an exchange rate (Australia/New Zealand, Canada/US, Norway/Sweden) versus countries that do (the EMU), Klein develops the theory that the Eurozone did precisely nothing to integrate the region’s economies. [Link, registration required]

Marissa Mayer’s Convoluted Yahoo Strategy: There’s No Place Like Home by Kara Swisher (ReCode)

Embattled Yahoo CEO Marissa Meyer spent $70,000 dressing her management team with elaborate costumes as a promotion for a holiday party; the irony of her selected literary theme is not lost on us. [Link]

May 1994 – What Happened When the Fed Last Diverged With Europe by Simon Kennedy (Bloomberg)

21 years ago, the Bundesbank was cutting rates to support a weak Europe and Alan Greenspan’s Fed was raising rates, helping to keep the dollar strong. [Link]


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