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.


Why Have Negative Nominal Interest Rates Had Such a Small Effect on Bank Performance? Cross Country Evidence (FRBSF Working Papers)

Using a comprehensive dataset of more than 5000 banks in Japan and Europe, the authors find little evidence that negative nominal interest rates have a significant negative impact on bank profitability in aggregate (though that may be less true for specific subgroups of banks). [Link; 32 page PDF]

Brussels steps up emergency planning for no-deal Brexit by Alex Barker, Arthur Beesley, and Anne-Sylvaine Chassany (FT)

While a hard Brexit isn’t necessarily likely, EU officials are starting comprehensive planning for that outcome should the UK leave the EU on its Article 50 trigger date next year without a deal on the post-Brexit relationship with the EU. [Link; paywall]


Traders Are Still Haunted by the VIX Five Months Later by Lu Wang and Elena Popina (Bloomberg)

The February collapse of short-vol products created a very specific fear of downside skew that investors appear to be taking to heart. [Link; paywall]


The New Tax Form Is Postcard-Size, but More Complicated Than Ever by Jim Tankersley (NYT)

While the new basic tax filing form is certainly more simple and its main details are roughly postcard sized, more than 6 other worksheets supplement the smaller basic form. [Link; soft paywall]


The FDA Approved Its First Cannabis Drug. What Next? by Alyssa Foote (Wired)

With the approval of Epidiolex (a drug designed to reduce seizures in epileptics), marijuana is now part of an FDA-approved medical treatment. It’s also legal in 8 states and DC, while even Oklahoma fully legalized medical marijuana by a comfortable margin this week (link; auto-playing video) in a bid to juice state revenues. [Link]

Tesla Energy Made Its Owner $2.5 Million in a Single Quarter by Jonas Elmerraji (The Street)

While most media attention focuses on building cars, Tesla also runs the largest battery installation on the planet (in Australia). The project makes money by arbitraging electricity prices intraday, buying when grid power is cheap and selling back when prices rise. [Link]

Trade Wars

Chip-Equipment Makers in Crosshairs of Trade War by Dan Gallagher (WSJ)

The extremely complex and trade-dependent semiconductor industry is set to become ground zero for the negative impacts of the escalating trade dispute between the US and China. [Link; paywall]

San Fran Stories

A six-figure salary is considered ‘low income’ in San Francisco, and the threshold is rising by Michelle Robertson (SF Gate)

Residents of San Francisco, San Mateo, and Marin counties are considered “low income” on a relative basis if they earn $117,000 per year. [Link]


The Gates Effective Teaching Initiative Fails to Improve Student Outcomes by Jay P. Greene (Education Next)

Bill and Melinda Gates’ foundation deployed more than $1bn (80% of which ultimately came from governments) in an effort to improve educational outcomes. The results showed teacher effectiveness and retention made little improvement as a result. [Link]


That ‘distracted boyfriend’ meme? Twitter users uncover the backstory of the woman by his side (Scroll)

You wouldn’t think a simple stock photo could at once contain so much intrigue, but you’d be wrong. Here’s the untold story of the girl from the distracted boyfriend meme. [Link]


They Played Dominoes Outside Their Apartment For Decades. Then The White People Moved In And Police Started Showing Up. by Lam They Vo (Buzzfeed)

As neighborhoods gentrify, previously commonplace and always innocuous activities like dominoes on the sidewalk are resulting in calls to the police as new arrivals seek to enforce rules that have never existed on the ground for long-time residents. [Link]


The International Olympic Committee Will Host a Forum on E-sports by Lisa Marie Segarra (Fortune)

The IOC has announced a forum to discuss e-sports and possible future collaboration between “old fashioned” and computer-based sports, a possible prelude to an inclusion in competition. [Link]

A team of AI algorithms just crushed humans in a complex computer game by Will Knight (MIT Technology Review)

While current basic AI doesn’t typically get much credit for collaborative and dynamic problem solving, one implementation was able to beat a human team at popular online strategy game Dota 2. [Link]

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Have a great Sunday, and happy Canada Day to our friends up north!

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