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.

Unemployment

Why did long-term unemployment rise in June 2018? by Ernie Tedeschi (Medium)

Former Bespokecast guest and ISI researcher Ernie Tedeschi takes a look at the very unusual spike in the number of workers who are long-term unemployed in last months’ Employment Situation Report. [Link]

Chicago May Become Largest City In U.S. To Try Universal Basic Income by Zaid Jilani (The Intercept)

The controversial social support mechanism universal basic income is being considered in Chicago. While its effects on work incentive, general welfare, government budgets, and other dimensions is at best uncertain, this possible experiment may provide some more evidence as to its worth. [Link]

China Charts

Chinese real estate, charted by Jamie Powell (FTAV)

A review of the sheer scale and potential risks of the Chinese real estate sector, which is rapidly shifting from a story of urbanization to pure speculation. [Link; registration required]

Notes on the Global Condition: The “Rise of China” – semi-regular scrapbook (2018 July) (Adam Tooze)

A sweeping picture of the advent of the Chinese economy, how it is managed, and the implications of its rapid, historically unprecedented ascent. [Link]

Real Estate

Even the cheapest homes are waiting for buyers (Bloomberg/Crain’s New York Business)

New York City real estate, especially Manhattan, is in the process of gearing down and in some cases significantly. That’s not just the high end either. [Link]

How dirty is Miami real estate? Secret home deals dried up when feds started watching by Nicholas Nehamas and Rene Rodriguez (Miami Herald)

After the federal government imposed a special disclosure review on Miami and Manhattan real estate markets in 2016, cash buys by shell companies collapsed to nothing. [Link]

ETFs

Hate ETFs? Quants Say They Found Anomaly to Profit on Their Flows by Lu Wang (Bloomberg)

Taking the other side of passive ETF flows delivered factor returns 2x the size of any other factor tracked by Bloomberg, per new Deutsche Bank research. [Link; soft paywall]

Do Passive Investors Move Markets? They Can by Asjylyn Loder (WSJ)

New research from S&P suggests that the $6.9 trillion in passive funds (both exchange traded and mutual funds) can have a very significant impact on the performance of markets overall due to flows in and out. [Link; paywall]

Shoe Tech

Nike Says Its $250 Running Shoes Will Make You Run Much Faster. What if That’s Actually True? by Kevin Quealy and Josh Katz (NYT Upshot)

A new quantitative analysis by the Upshot team based on publicly available Strava data suggests that a new kind of running shoe sold by Nike delivers a 4% improvement in marathon times. [Link]

Europe

E.U. Fines Google $5.1 Billion in Android Antitrust Case by Adam Satariano and Jack Nicas (NYT)

The largest economic bloc on the planet has delivered a remarkable rebuke to Alphabet’s business practice in the mobile phone market, adding to another multi-billion fine last year related to Google’s practice of promoting its own services in business results. [Link; soft paywall]

How EEC membership drove Margaret Thatcher’s reforms by Nauro Campos and Fabrizio Coricelli (Voxeu)

Conventional wisdom claims that structural reforms to the UK economy in the 1980s helped the UK keep pace with continental economic growth. This new review of the literature and econometric study, however, finds European Economic Community (an EU precursor) membership was far more important. [Link]

Extremism

Austrian State May Require Jews to Register to Buy Kosher Meat (Haaretz)

A far-right politician in the Austrian state of Lower Austria (the only member of his party involved in that government) responsible for animal welfare has proposed creating lists of Jews and Muslims. He claims the list will be insured to make sure that kosher or halal butchering practices are kept to a minimum, but the method is recalling despicable historical practices from the region during the rise of the Third Reich. [Link]

Alt-Right Troll To Father Killer: The Unraveling Of Lane Davis by Joseph Bernstein (BuzzFeed News)

The gruesome, depressing, and grim story of a leading voice of the online alt right who eventually murdered his father when his parents asked him to leave their home. [Link]

Crypto

Coin-Operated Capitalism by Shaanan Cohney, David A. Hoffman, Jeremy Sklaroff, and David A. Wishnick (SSRN)

A comprehensive review of initial coin offering white papers and contracts, before comparing them to actual code. The results show a huge gap between protections claimed and what was actually offered in hard code, suggesting that in contrast to claims of “trustless” architecture, the ICO and larger crypto markets are actually highly reliant on trust. [Link]

BlackRock’s Fink Says Clients Have Zero Interest in Crypto by Erik Schatzker (Bloomberg)

The CEO of one of the world’s largest asset managers says that none of its massive array of clients has sought exposure to cryptocurrency. [Link; soft paywall, auto-playing video]

Social Media

Bloomberg Launches a Twitter Feed Optimized for Trading (PR Newswire)

A new algorithmic trading product is being introduced by Bloomberg in order to more cleanly facilitate digestion of Twitter data. [Link]

Congratulations, Mr. President: Zuckerberg Secretly Called Trump After The Election by Ryan Mac and Charlie Warzel (BuzzFeed News)

In a revelation sure to stoke controversy for Facebook, internal documents show CEO Mark Zuckerberg calling President Trump to congratulate him on his victory. Given the size and importance of Trump’s Facebook ad buys, this might not be so surprising. [Link]

Health Care

The incredibly frustrating reason there’s no Lyme disease vaccine by Brian Resnick (Vox)

Ever wondered why you can’t get a vaccine for the terrifying prospect of a tick-borne bout of Lyme disease? Here’s the backstory. [Link]

Potential DNA Damage from CRISPR “Seriously Underestimated,” Study Finds by Sharon Begley (Scientific American)

The extremely promising gene editing protocol CRISPR (which we’ve included links to in the past) may have disastrous consequences, potentially creating artificial cancer or similar cellular dysfunction. [Link]

More

Tesla Model 3 Critic Flips View, Sees Sedan Being Profitable by Tom Randall (Bloomberg)

While Munro & Associates’ initial teardown of Tesla Model 3s saw them as unprofitable and facing massive quality issues, newer teardowns have suggested ~30% gross margins. [Link; soft paywall, auto-playing video]

Plutonium went missing in San Antonio, but the government says nothing by Patrick Malone and R. Jeffrey Smith (My San Antonio/Center of Public Integrity)

Two Department of Energy employees retrieved a briefcase containing plutonium and cesium from San Antonio, Texas, but had the briefcase stolen from their car while they stayed at a hotel overnight. [Link]

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Have a great Sunday!

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