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.

Big Economic Questions

The Question Isn’t Why Wage Growth Is So Low. It’s Why It’s So High. by Neil Irwin (NYT Upshot)

Over time, wages are governed by three factors: inflation, productivity, and labor bargaining power. While the latter has gotten all of the attention in recent years, wages have actually been stronger than the first two factors would predict, suggesting that low wages aren’t actually the problem to be worried about. [Link; soft paywall]

Economic dynamism falls across the US by Sam Fleming and Lauren Leatherby (FT)

The Economic Innovation Group’s index of dynamism (which includes metrics of firm creation or destruction, churn in the jobs market, labor force participation, and other statistics) has fallen across the country persistently for decades. [Link; paywall]


Rural America Is The New ‘Inner City’ by Janet Adamy and Paul Overberg (WSJ)

Birth to death ratios, employment, wages, health outcomes: all are lagging and deteriorating in rural communities across the country. [Link; paywall]

America’s Cities Are Running Out of Room by Patrick Clark (Bloomberg)

Urban areas have many advantages, but lots of available space is not one of them. As demand for in-city and near-city housing accelerates, land space is running out. [Link; auto-playing video]

More on America’s unproductive homebuilding sector by Matthew C. Klein (FTAV)

An excellent analysis of the dismal productivity in the US homebuilding sector including some excellent charts and data. [Link; registration required]

Real Estate

Toronto Homeowners Are Suddenly in a Rush to Sell by Kim Chipman (Bloomberg)

Preliminary data from the Toronto Real Estate Board suggests a plunge in the ratio of sales to listings, a leading indicator of home price growth in the Greater Toronto Area. [Link; auto-playing video]

Is This a House or a Playground? by Stefanos Chen (WSJ)

Slides to get around, custom bunk beds, 12 foot ceilings in the basement, a custom 8-person Tempur-Pedic mattress, seven bedrooms, eleven bathrooms…this 13,000 square foot South Dakota home is a paradise for its young occupants. [Link; paywall]

Fixed Income

How I Learned to Stop Worrying and Love the Basis by Guy Debelle (RBA)

An excellent speech from the Deputy Governor of the RBA, offering explanation and detail on the cross-currency basis that should rationalize the conversation around the obscure relationship. [Link]


Mnuchin Wants Debt-Limit Increase With No Conditions Attached by Kate Davidson and Richard Rubin (WSJ)

The Treasury is now expecting to run out of cash and hit the debt limit in July, prompting the Treasury Secretary to urge Congress to raise the debt ceiling as soon as possible without any strings attached; that move would require Democrats as a Freedom Caucus statement this week opposed such a move. [Link; paywall]


Canada backs off blockchain interbank payment system by Neil Ainger (CNBC)

The Bank of Canada had taken a look at using a distributed ledger for the country’s interbank payment system, but after reviewing the prospects has decided against shifting to that technology. [Link]

DTCC to Launch Blockchain Credit Default Swaps Reporting in Early 2018 by Alex Lielacher (NASDAQ)

The Depository Trust and Clearing Corporation, an entity that serves as the settlement facility for the CDS (and other) markets, wants to have a parallel blockchain-based settlement platform for CDS by Q1 2018. [Link]

Media Matters

As Trump’s Problems Mount, Brietbart’s Numbers Are Cratering by Tina Nguyen (Vanity Fair)

Right-wing Brietbart got massive traffic when it went on offense against the Obama Administration and the Clinton campaign but as other media outlets see strong traffic covering the early struggles of the Trump White House, Brietbart’s rank has plummeted. There are some interesting details in the article around digital media as well: the importance of The Drudge Report, and the difficulty of measuring traffic. [Link]


Portugal exits EU budget procedure six years after bailout by Jim Brunsden, Peter Wise, and Mehreen Khan (FT)

With a budget deficit falling to 2% of GDP in 2016, Portugal is no longer in breach of Eurozone budget rules. With the announcement, on Spain, France, and Greece remain in breach of the stability and growth pact rules. [Link; paywall]

Culture and household saving by Benjamin Guin (ECB Working Paper Series)

We’re somewhat unconvinced that cultural factors are a significant explanation of national savings rates, but this paper does a good job investigating differences in regional savings rates inside countries. [Link; 67 page PDF]


Tudor Jones backs AI hedge funds by Robin Wigglesworth and Lindsay Fortado (FT)

Legendary macro investor Paul Tudor Jones has invested in funds that use AI to pick investments including CargoMetrics and Numerai. [Link; paywall]

Exclusive: Google launches AI investment platform by Dan Primack (Axios)

Google is going to try and use AI to pick venture investments. [Link]


The Rise of the Amateur Oil Sleuths by Georgi Kantchev (WSJ)

An overview of the diverse landscape of oil research, which is being fueled by both talented amateur analysts and high tech professionals looking for an edge. [Link; paywall]


Twitter Bug Allowed Hackers To Tweet From Any Account by Lorenzo Franceschi-Bicchierai (Vice)

A vulnerability in Twitter’s advertiser platform meant it was possible for almost anyone to tweet from the account of anyone else. That backdoor has now been closed. [Link]

Novice Nomura Trader Tells Jury How Bosses Taught Him to Lie by Chris Dolmetsch (Bloomberg)

Mortgage bond traders systemically deceived customers about how much they had paid for bonds, teaching junior employees how to do the same. [Link]

Just for the zols by George Hay (Reuters)

Zimbabwe is creating fake dollars by electronically crediting bank balances with entries in USD that are not backed by reserves, creating a discount for dollars in a bank versus physical cash. [Link]

America Second?

In the Stock Market, International Is Actually First by Jeff Sommer (NYT)

International equities are trouncing the US in recent quarters, but the dependence on international sales and profits goes deeper than foreign versus domestically listed stocks. [Link; soft paywall]

Labor Markets

The Exquisitely English (and Amazingly Lucrative) World of London Clerks by Simon Akam (Bloomberg)

A review of the go-betweens for UK barristers (attorneys appearing in court) and solicitors (attorneys who provide legal advice without appearing in court). [Link]

‘I’m ruined’: Workers realize too late that they signed away the right to other jobs by Conor Dougherty (Raleigh News & Observer/NYT)

Production workers traditionally unconstrained by obscure legal provisions in their contracts are increasingly facing non-competes and other passages designed to keep them bound to existing employers. [Link]


Winning Yankees Aren’t Faring Nearly as Well at the Ticket Office by Billy Witz (NYT)

Lots of wins and a few great personnel stories aren’t helping move tickets for the Bronx Bombers. [Link; soft paywall]


Dutch police eagle on standby at Nato summit to take down drones (Dutch News)

The NATO summit in Brussels this week was defended by eagles trained to attack drones violating the airspace above the event. [Link]

Have a great Sunday!

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