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.

Economic Research

Income inequality in the United States: it’s flatter than you probably realize by Phillip W. Magness

A new data set suggests that previous claims about the extreme level of inequality were exaggerated by methodological issues in the ubiquitous Capital In The 21st Century. [Link]

Religious Competition And Reallocation: The Political Economy Of Secularization In The Protestant Reformation by Davide Cantoni, Jeremiah Dittmar, and Noam Yuchtman

The authors of this working paper convincingly argue that the Reformation created competition between religious elites, allowing non-religious (secular) elites to fill the gap, therefore tilting Europe towards secularization on a permanent basis. [Link; 74 page PDF]

Can an Emerging Economy Get Into Financial Trouble by Holding Too Many Foreign Assets? by Brad W. Setser (Council on Foreign Relations)

Usually, emerging markets run in to problems because they don’t have enough foreign currency-denominated assets. Taiwan may have managed to gobble down too much of a good thing. [Link]

Financial Developments

How Five Robots Replaced Seven Employees at a Swiss Bank by Stephan Kahl (Bloomberg)

A Swiss bank used a software-based solution instead of human beings to conduct a specific task; in many ways, this is what IT departments have been doing for a long time. [Link; soft paywall, auto-playing video]

Does the VIX Need Fixing? Sure Looks That Way by John M. Griffin (Bloomberg)

Deviations between the monthly settlement prices and opening prices a few seconds later suggest that the VIX is being manipulated, but the owner of the index claims the process is normal. [Link; soft paywall]

Why Americans Are Getting Paid to Invest Abroad by Mike Bird (WSJ)

High hedging costs for European and Japanese investors who want to own USD bonds mean US-based investors can earn a high return by taking the other side of the trade. [Link; paywall]


The Return of the Brick-and-Mortar Store by Conor Sen (Bloomberg)

The costs of operating an online-only retail businesses (ads, mostly) are rising, just as the costs of operating brick-and-mortar retail businesses (rent) are falling. [Link]


At Nike, Revolt Led by Women Leads to Exodus of Male Executives by Julie Creswell, Kevin Draper and Rachel Abrams (NYT)

Fed up with mistreatment and a lack of career opportunity, women at Nike conducted an anonymous survey to establish a pattern of abuse from male executives. The result was a rash of departures as the company purged offenders. [Link; soft paywall]


Can You Overdose on Happiness? by Lone Frank (Nautilus)

Given that technology now exists to directly stimulate the human brain and produce happiness (albeit at great cost and typically only in situations where there’s a therapeutic need), we need to start thinking about what the upper limit of “healthy” happiness is. [Link]

A Bit Much

They’re now making vodka from San Francisco fog by Charles Passy (MarketWatch)

A distillery (which actually does quite a good job in their typical offerings, from what we’ve tasted) in San Francisco is now using the city’s famous fog to create vodka that is the essence of San Francisco. [Link]

Derby Days

The Gambler Who Cracked the Horse-Racing Code by Kit Chellel (Bloomberg)

A dive inside the shadowy world of professional horse race gambling, including the story of the men tha correctly predicted a trifecta (the top three finishers, in order) in three consecutive races. [Link; soft paywall]


Evolution of the English Alphabet by Matt Baker (Useful Charts)

A set of charts designed to show how the earliest written alphabets slowly evolved into the modern English alphabet. [Link]

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Have a great Sunday!

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