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.

Trump Effects

December Still A Go by Tim Duy (Tim Duy’s Fed Watch)

While the market still has a lot of pondering to do about the longer-term impact of Trump’s election on the Federal Reserve (witness post-election price action in the long end of the curve or Eurodollar markets), December is  almost 100% priced and looks likely to be a hike, per Oregon economics professor Duy. [Link]

Straight Talk on Trade by Dani Rodrik (Project Syndicate)

Did economists actively deceive the general public about the distributional consequences of trade, fueling the populist backlash Trump rode to office? We don’t necessarily endorse the conclusions Rodrik draws but we think the piece is interesting and worthwhile reading! [Link]

Assessing The Administration

The Education of David Stockman by William Grieder (The Atlantic)

36 years ago another Republican swept to office (although in a less surprising victory than November’s outcome). The internal dynamics of the Reagan Administration are interesting to consider now given markets’ aggressive extrapolation of what policies a Trump White House might pursue. [Link]

Ringside With Steve Bannon at Trump Tower as the President-Elect’s Strategist Plots “An Entirely New Political Movement” (Exclusive) by Michael Wolff (The Hollywood Reporter)

You could be forgiven, based on the outlet, for not taking this long piece on Trump strategist Steve Bannon seriously. But we found it revealing in terms of what Bannon cares about, and therefore what a Trump White House may care about. [Link]

Dollars

How Donald Trump Could Exacerbate a Global Dollar Shortage by Tracy Alloway (Bloomberg)

Since election day, the USD has positively soared, and while that hasn’t shown an obvious influence on other markets like equities, the increase in expense of dollar funding combined with less dollar availability has potential to get painful for the global financial system. [Link]

The bank/capital markets nexus goes global by Hyun Song Shin (BIS)

An illuminating overview of the role the USD plays in global asset markets. Little in this presentation is new from the perspective of Shin’s work, which has focused on this dynamic for some time, but the summary is helpful. [Link; 14 page PDF]

Modern Life

Divorce in U.S. Plunges to 35-Year Low by Ben Steverman (Bloomberg)

Divorce rates are falling and marriage rates are moving very slightly higher. But that doesn’t necessarily mean that more marriages last for the long haul, with demographics and changing norms muddying the picture. [Link]

The Sharing Economy

The Online Platform Economy: Has Growth Peaked? (J.P. Morgan Chase & Co Institute)

While growth of participation in online platforms for labor (for instance, Uber or TaskRabbit) and capital (for instance, AirBnB) remains gaudy compared to many industries, the composition of that growth and turnover within the labor pool should be troubling for companies that depend on huge new inflows of providers. [Link; 28 page PDF]

Code

The Next Generation of Hedge Fund Stars: Data-Crunching Computers by Alexandra Stevenson (NYT)

An overview of the multifaceted and ubiquitous role machines play in the generation and analysis of data sets related to investing. To throw a bit of water on the triumphalism: as one of our team noted about the story, returns from these strategies don’t get a single mention in the article. [Link; soft paywall]

Secrets Of Online Shopping Discrimination (CBS Miami)

In the language of economics, “price discrimination” doesn’t carry the same negative associations as the word “discrimination” in the common parlance. That doesn’t mean, though, that shoppers will be thrilled to find out that their demographics, purchase history, and shopping platform may result in them seeing different prices than others. [Link]

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