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.

The Big Game

Mexican Avocado Group Makes Super Bowl Pitch as Trump Tax Looms by Craig Giammona (Bloomberg)

A brief history of the remarkable positive feedback effect of Mexican avocado imports, which have kicked off a domestic US industry in addition to supply guac for the Super Bowl. [Link]

Super Bowl billions: The big business behind the biggest game of the year by Joe D’Allegro (CNBC)

A rundown of the biggest sponsors, ticket-buyers, investors, and suppliers for the most-watched TV event of the year. [Link; auto-playing video]


Snap’s offer of voteless shares angers big investors by Stephen Foley (FT)

With a detailed S-1 dropping this week, some less-than-palatable details about the $3bn capital raise on public markets planned by Snap Inc began to emerge. [Link; paywall]

Exclusive: Snap’s secrecy frustrates banks’ pursuit of IPO glory by Lauren Hirsch and Liana B. Baker (Yahoo News/Reuters)

The majority of banks participating in underwriters of the Snap IPO did not have access to the draft S-1 filing before agreeing to help sell shares. [Link]


Trump and the Power of the Presidency by Katerine Mangu-Ward (Reason)

Expect to hear many arguments like this one in the coming years as libertarians and traditional conservatives alike point to the current President as evidence that the Executive Branch should have its powers more sharply constrained. [Link]

The Data That Turned the World Upside Down by Hannes Grassegger and Mikael Krogerus (Vice Motherboard)

A look at the extremely sophisticated (and evidently effective) ad strategies run by the Trump campaign, including detailed background on the psychological principals applied. [Link]


The Fed Was Getting More Predictable Until Trump Got Elected by Matthew Boesler (Bloomberg)

Discounting fiscal stimulus, assessing threats to independence, and considering the new path of the dollar: all of these are factors that the Fed didn’t have to deal with but are now critical, driving volatility in interest rate markets up a bit. [Link; auto-playing video]

How Immigration Uncertainty Threatens America’s Tech Dominance by Christopher Mims (WSJ)

Unintended consequences are always a feature of any policy change and in this case, recent events may act as a catalyst on an already present trend: American companies setting up offices outside the US to avoid its immigration system. [Link; paywall]

Fiduciary Rule Is Now in Question. What’s Next for Investors. by Ron Lieber (NYT)

Note: our next episode of Bespokecast, due out early next week to subscribers, features a lengthy discussion of the fiduciary rule with Kestra Financial CEO Rob Bartenstein.

Will advisors have to abide by the Department of Labor edict issued last year or not? [Link; soft paywall]


The End of Employees by Lauren Weber (WSJ)

One of the most fundamental relationships in our modern social contract are the rights and obligations exchanged by an employer and those they hire. Now, however, that relationship is under threat by arrangements which subcontract all labor to other businesses. [Link; paywall]

Taxi Medallion Prices Are Plummeting, Endangering Loans by Polly Mosendz and Shaien Nasiripour (Bloomberg)

With ridesharing apps sending the price of medallions cratering, once-safe cashflows in major taxi markets now back millions of dollars of debt. [Link]

Obscure Markets

Banks Make Unwanted Risk Lucrative With Bets for Hedge Funds by Alastair Marsh and Donal Griffin (Bloomberg)

Banks are earning impressive fees for trades that transfer default risk to investors via securitization with the explicit goal of reducing capital charges at large banks by lowering risk-weighted assets that capital requirements are calculated against. [Link]

Cocoa Rout Spurs Concern Some Farmers Will Return to Cocaine by Marvin Perez (Bloomberg)

In parts of South America, farmers have a choice between legal cash crops like cocoa and illicit coca leaves. When prices for cocoa crash, some may be more inclined to grow the raw input for cocaine. [Link]


Heisenberg’s Astrophysics Prediction Finally Confirmed After 80 Years by Ethan Siegel (Forbes)

Astrophysics is almost always so far over our heads it’s comical, but this is an interesting story about advances in physics confirming an 80 year old theory about quantum mechanics. [Link; auto-playing video]

Billionaire closer to mining the moon for trillions of dollars in riches by Lori Ioannou (CNBC)

Moon Express has raised $45mm in private capital with the goal of travelling to the moon in late 2017. The goal? Access to the moon’s resources which include a variety of molecules in short or expensive supply from terrestrial producers. [Link; auto-playing video]


Tesla’s Battery Revolution Just Reached Critical Mass by Tom Randall (Bloomberg)

Three plants in California are going live at almost the same time, together totaling about 15% of globally installed battery capacity and offering the potential for a sea-change in how energy markets work with the potential to store renewable production and release it as needed by the market. [Link]

Dropbox and Slack adapt services for cloud connection by Richard Waters (FT)

Two giants of the new wave of business apps produced in Silicon Valley are introducing new efforts to reduce fragmentation and get entire organizations on the same page. [Link; paywall]


Betting on Nordic Rain Pays Better Than Average Hedge Fund by Jesper Starn (Bloomberg)

Funds betting on Scandinavian power markets had a volatile year with double-digit returns for some funds versus large declines for competitors amidst a surge in financial power contract trading in the region. [Link]


Stretching Exercises Are In as the Next Fitness Fad by Joanne Kaufamn (NYT)

A series of businesses designed to relax and lengthen tired muscles are starting to pop up across the country. [Link; soft paywall]

The Buck

Why the Dollar Is Likely to Fall This Year by Kopin Tan

Contrarians on the strength of the dollar (which rocketed higher post-election) have been right so far this year as the USD has fallen broadly. Is more in store? This story features a nice shout-out to our work on the impact the dollar has for US equity markets. [a href=”http://www.barrons.com/articles/why-the-dollar-is-likely-to-fall-this-year-1486189556?mod=BOL_hp_we_columns” target=”_blank”>Link]


This trader bets it all on Apple getting crushed after earnings by Shawn Langlois (MarketWatch)

A Canadian was on the wrong side of Apple’s earnings this week, the last in a series of disastrous trades which have evaporated an inheritance that once counted in the 7 figures range. [Link]


Trade flows between the US, UK and EU27: what goes where? by Filippo Biondi and Robert Kalcik (Bruegel)

An interesting look at three-way trade flows between America, the UK, and the European Union. [Link]

Have a great Sunday!

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