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.

Middle Class Pain

Real Clear Politics is running a five part series on the big economic issues facing the middle class this election. We note the first three instalments below; the full series is available here.

Stagnant Pay Says It All by Alexis Simendinger (Real Clear Politics)

Stagnant wages for much of the country (median real income has been flat for years) belies the relatively strong economic growth the United States has enjoyed versus other major developed countries since the end of the recession. [Link]

NAFTA and the Angry Middle-Class Voter by Carl M. Cannon (Real Clear Politics)

The North American Free Trade Agreement, envisioned by Reagan, negotiated by George H. W. Bush, passed by Clinton, and expanded by George W. Bush, has been a target this election season; what are its actual effects? [Link]

Families Struggle to Afford College by Emmeline Zhao (Real Clear Politics)

Pain for the middle class isn’t just about dollars in or jobs out; it’s also about growing costs to achieve a measure of stability via the educational system. [Link]

Brexit Consequences

FX: Brexit imperils City’s status as euro-clearing hub by Paul Golden (Euromoney)

London currently enjoys the ability to clear euro-denominated trades under the aegis of its links via EU membership. But the ECB, anxious to oversee clearing and settlement as part of its efforts to maintain financial stability, could render The City unable to process euro-linked trades after a Brexit. [Link]

Brexit – Won’t Somebody Think of the Money Markets? by Tracy Alloway (Bloomberg)

Short-term interest rate differentials for money markets in dollars are starting to show some signs that Brexit would bring unintended (and possibly very problematic) consequences. [Link]

Market Structure

Please let’s stop saying US primary dealers are required to make markets (updated) by Alexandra Scaggs (FT Alphaville)

In her debut post at Alphaville, Scaggs delivers a frankly fantastic myth-busting of how the market for Treasury debt actually works. WARNING: nerds – or market structure fanatics – only. [Link; registration required]

Silicon Valley’s Audacious Plan to Create a New Stock Exchange by Ellen Huet and Brad Stone (Bloomberg)

The latest idea on how start up tech businesses could avoid traditional IPOs involves the creation of an entirely new market for equity stakes in companies. [Link; auto-playing video]

Green Tech, Greenbacks

Apple is making so much clean energy, it formed a new company to sell it by Jordan Golson (The Verge)

An effort to provide green energy for its facilities has left the company with a surplus of power; it’s now working to monetize that surplus. [Link]

Tesla’s Betting You’ll Pay $9,000 for a Software Upgrade by David Ingold (Bloomberg)

An overview of the software upgrade which can add 40 miles of range to a Tesla with a little bit of code and no hardware of any kind. [Link]

Nature Harnessed

Weather-tracker offers ray of sunshine for hedge funds by Lindsay Fortado (FT)

Some details on the fantastic profits of the weather derivatives fund Cerberus, which has returned 970% cumulative over the last decade. [Link; soft paywall]

A rare tour of the Strategic Petroleum Reserve by Brian Scheid (S&P Platts)

A fascinating look at the geological formations which hold millions of barrels of oil underground along the Gulf Coast. [Link]

Social Networking

Facebook Offers Tools for Those Who Fear a Friend May Be Suicidal by Mike Isaac (NYT)

Intervention from loved ones and friends can play a critical role preventing tragedy, so Facebook has started to integrate tools for outreach when its users suspect one of their friends may be suicidal. [Link; soft paywall]

One Unspoken Reason Behind the Microsoft-LinkedIn Deal by Andrew Ross Sorkin (NYT Dealbook)

Stock-based compensation ran extraordinarily high at LinkedIn and the profligacy of grants to employees may have been one of the key motivations to sell. [Link]

Microscopic Microchips

Barefoot Networks’ New Chips Will Transform The Tech Industry by Cade Metz (Wired)

A new entrant has developed an open architecture that will allow end users to modify how switches (which connect computers within networks) operate. [Link]

A rare, risky mission is underway to rescue sick scientists from the South Pole by Sarah Kaplan (WaPo)

An unspecified illness suffered by a Lockheed Martin employee at the Amundsen-Scott research station at the South Pole is forcing a risky rescue flight in the middle of the Antarctic winter. [Link]


A Fireside Chat With Charlie Munger by Jason Zweig (WSJ)

An overview of 5 hours of Mungerisms from the sidekick to Warren Buffet at Berkshire Hathaway, Charlie Munger. [Link]

Central Banking

Fed Decision Makers Wrestle With So-Called Natural Rate by Harriet Torry (WSJ)

A summary of the ongoing debate within and around the Federal Reserve regarding the natural rate of interest which is neither stimulative nor a damper on economic growth. [Link; paywall]

Real Estate

Bidding Wars in the Suburbs by Lisa Prevost (NYT)

Entry level homes close to amenities, a short commute from New York City, and within strong school districts are commanding an enormous premium to the rest of the market as large luxury homes see slack demand. [Link; soft paywall]

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