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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Blood In The Streets
Paul Tudor Jones says he can’t think of a worse financial environment for stocks or bonds right now by Yun Li (CNBC)
Macro hedge fund manager Paul Tudor Jones argues that the environment couldn’t get much worse, which at least has the ring of a contrarian opportunity…after all, if things can’t get worse, next they have to get better. [Link]
The Popping of the Bubble Stocks: An Update by Ray Dalio (LinkedIn)
Bridgewater’s Dalio declares a bubble in US equities has popped, but isn’t optimistic about the path forward for the market from here. [Link]
Tiger is suffering one of the biggest hedge fund drawdowns in history by Robin Wigglesworth (FTAV)
Massive tech hedge fund Tiger has been cut nearly in half this year as tech and growth stocks that it tends to hold get uniquely crushed. It’s unclear whether the fund can weather declines these large and remain a going concern. [Link; registration required]
Stocks and Bonds Are Falling in Lockstep at Pace Unseen in Decades by Gunjan Banerji (WSJ)
The combined drop in stocks and bonds isn’t unprecedented, but it’s highly unusual and it is extreme, putting pressure on investors across markets for it’s unusual one-two hit to brokerage balances and retirement accounts. [Link; paywall]
Citi acknowledges trading error after flash fall in some European shares by Joshua Franklin and Philip Stafford (FT)
A human error by a Citibank trader led to an 8% collapse in benchmark Swedish equity index on Monday; the drop didn’t last long despite the “bungled” execution on a basket of shares Citi was trading for a client. [Link; paywall]
Blue Bird
‘I Don’t Really Have a Business Plan’: How Elon Musk Wings It by Ryan Mac, Cade Metz and Kate Conger (NYT)
An inside look at the aggressive and free-wheeling world that Elon Musk inhabits, with little negative feedback and lots of micromanagement. [Link; soft paywall]
Investment Management
Wells Fargo Accidentally Kills Off FA in Letter to Clients by James Rogers (Financial Advisor IQ)
After an advisor left Wells Fargo’s wirehouse for an affiliate of Kestra Financial, WFC accidentally sent out a letter to his clients announcing his death. [Link]
Fidelity to Allow Retirement Savers to Put Bitcoin in 401(k) Accounts by Anne Tergesen (WSJ)
The 401k giant will soon allow investors to allocate retirement funds to bitcoin, opening the tax-advantaged investment accounts of employees at more than 20,000 companies to the crypto markets. [Link; paywall]
This $500 Billion Private Club for Family Offices Is Booming by Benjamin Stupples (Bloomberg)
As the number of family offices bloom, they’re starting to share information and education via an informal club that hosts regular events for its 250 members representing AUM of nearly half a trillion dollars. [Link; soft paywall]
Slowing Demand
Former Fed Vice Chair Quarles Says U.S. Is Likely to Suffer Recession by Rich Miller (Bloomberg)
After being ousted from the Fed when his term on the FOMC was complete, former Vice Chair for Supervision Randall Quarles thinks the Fed will need to hike so much that a recession will take place. [Link; soft paywall]
Americans Are Showing Inflation Fatigue, and Some Companies See a Breaking Point by Sharon Terlep (WSJ)
After spending two years busily buying everything they could get their hands on, American consumers are starting to balk at some of the prices that they’re being charged for discretionary items. [Link; paywall]
A third of small retailers can’t pay rent as financial struggles spike again by Ben Unglesbee (Retail Dive)
One in three smaller retailers are unable to cover their rent, with almost half saying their rent has risen over the next six months; smaller retailers aren’t able to absorb costs and pass on price hikes as well as larger retailers. [Link]
Shaky Lending
Used-Car Dealer Debuts Subprime Auto Bond Even as Sector Weakens by Adam Tempkin and Charles E Williams (Bloomberg)
Car-Mart, a used auto retailer targeting subprime quality buyers, priced an ABS backed by lower-quality loans yesterday and was able to sell them despite a steep concession demanded by investors. [Link; soft paywall]
‘Buy now, pay later’ is sending the TikTok generation spiraling into debt, popularized by San Francisco tech firms by Joshua Bote (SFGate)
Buy now, pay later (BNPL) is a way to take on debt at a potentially lower cost than credit cards. But 91% of consumer loans in California from 2020 were BNPL loans, and the seductive nature of the loans which lower the upfront cost of paying for big ticket items is starting to prove a challenge for some borrowers. [Link]
Data Privacy
CDC Tracked Millions of Phones to See If Americans Followed COVID Lockdown Orders by Joseph Cox (Vice)
CDC policymakers used anonymized location data to see how the public responded to curfews and other activity restrictions. While there is no evidence the CDC misused the data, FOIA requests reveal significant potential privacy concerns from the project. [Link]
Google lines up with Apple and Microsoft to nix passwords in favor of nearby-device authentication by Rob Pegoraro (Fast Company)
Major device and software companies are moving towards an open architecture that relies on identify verification on a smartphone in order to access other systems like laptops or PCs. [Link]
Location, Location, Location
$1-million milestone: Orange County median home price hits seven figures. by Andew Khouri (MSN/LAT)
Orange County is a sprawling Southern California polity with a diverse population, but housing has rapidly spiraled out of reach: the median home price has topped $1mm, a 22% jump versus a year ago. [Link]
I-Team: Body found in barrel in Lake Mead may date back to 1980s, more likely to appear as water recedes, Las Vegas police say by David Charns (8NewsNow)
A murder victim who was stuffed into a barrel in the 1980s was discovered in Lake Mead recently; authorities expect more such remains to emerge as brutal drought lowers the lake’s level. [Link]
Ball Games
What the heck is going on with the baseball? Everything you need to know about MLB’s scoring drought (ESPN)
Offense as measured by both batting average and scoring is among the lowest in league history to start this season as home runs disappear thanks to an intentional set of changes to the ball itself which may have gone further than expected. [Link; auto-playing video]
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Have a great weekend!
