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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Why Do Borrowers Default on Mortgages? A New Method For Causal Attribution by Peter Ganong & Pascal J. Noel (NBER Working Papers)
What drives default on mortgages? The authors estimate that roughly 97% of all mortgage defaults take place because of an adverse shock which leaves borrowers unable to cover their monthly payment, not because they are strategically walking away from an LTV over 100. [Link; soft paywall]
How Teach for America Affects Beliefs about Education by Kathrine M. Conn, Virginia S. Lovison, and Cecilia Hyunjung Mo (Education Next)
TFA volunteers acquire a greater appreciation for societal inequality in educational under-attainment, reduces support for charter schools and vouchers, and raises optimism that an excellent education in the US is possible for all children. [Link]
The Divergent Signals about Labor Market Slack by Troy Gilchrist & Bart Hobijn (FRBSF Economic Letter)
Using a broader snapshot of the labor market shows that on balance the U3 unemployment rate is roughly representative of where things currently stand…with the important caveat that dispersion across indicators is much higher than historically has been the case. [Link]
Restaurants, Supermarkets Can’t Find Enough Workers to Open New Locations by Jaewon Kang & Heather Haddon (WSJ)
Grocers and restaurants that rely on large pools of low-prerequisite labor are struggling to find enough workers to staff new locations. [Link; paywall]
Why dirt from Mars could be the most expensive substance known to mankind (Science Insider/Twitter)
Three different joint space missions are hoping to bring back a couple of pounds of soil from Mars at a price tag of more than $9bn, making it easily the most expensive way to grow tomatoes ever devised (note: that’s not what scientists will use it for). [Link]
Building a Home in the U.S. Has Never Been More Expensive by Marcy Nicholson, Dave Merrill, & Cedric Sam (Bloomberg)
A fascinating walk-through of how much prices have risen for key inputs to home construction. Lumber features prominently but many other costs have also soared. [Link; soft paywall]
Covid-19 Prevention Measures Are Keeping Childhood Diseases Like Chickenpox at Bay by Peter Landers & Miho Inada (WSJ)
While COVID and related responses have had lots of negative impacts on children, there are some positives: more handwashing, masks, and other non-pharmaceutical interventions have led to a collapse in case counts for diseases like flu, chicken pox, strep throat, and rotavirus. [Link; paywall]
Moderna to take mRNA flu and HIV vaccines into Phase 1 trials this year by Rachel Arthur (BioPharma)
The company behind one of the two mRNA vaccines that were first to market in the fight against COVID is starting Phase 1 trials for flu and HIV this year, with another vaccine against cytomegalovirus (which causes mononucleosis). [Link]
Matters of State
Shrinking California by Will Wilkinson (Substack)
In 2020 California’s population shrank by over 180,000 people, with an interesting array of implications for both that state’s politics and states where former residents of the Bear Flag Republic are heading to. [Link]
West Virginia Gov. Jim Justice Is Personally Liable for $700 Million in Greensill Loans by Julie Steinberg & Duncan Mavin (WSJ)
Companies owned by West Virginia’s two-term governor are on the hook for hundreds of millions in loans backed by coal receivables, and the financial liability may roll all the way up to the governor’s mansion. [Link; paywall]
Inside The ‘World’s Largest’ Video Game Cheating Empire by Lorenzo Franceschi-Bicchierai (Vice)
A group that found exploits to Tencent’s Playerunkown Battlegrounds Mobile and sold them for millions ended up attracting the attention of Chinese police. [Link]
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Have a great weekend!