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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Elections

What if Facebook Is the Real ‘Silent Majority’? by Kevin Roose (NYT)

Political polling and betting markets show a pretty clear advantage for former Vice President Joe Biden in November, but Facebook is the heartland for conservative enthusiasm around Donald Trump. [Link; soft paywall]

U.S. Election Priced as Worst Event Risk in VIX Futures History by Michael P. Regan (Bloomberg)

The VIX futures curve is badly kinked around October’s contract, which is tied to options covering the period of the US election. [Link; soft paywall]

Exclusive: Dem group warns of apparent Trump Election Day landslide by Margaret Talev (Axios)

Leaving the slightly hyperbolic headline aside, there is a very real possibility that mail-in/absentee voting creates big differences between in-person results and the actual vote totals come election day. [Link]

Trump’s popularity slips in latest Military Times poll — and more troops say they’ll vote for Biden by Leo Shane III (Military Times)

In 2016, Military Times polling showed a 46-37 positive favorability for the President, but today that has more than flipped with a 50-38 unfavorable tilt among uniformed service members; respondents report they plan to vote 41-37 for Biden versus 41-21 advantage for President Trump in October 2016. [Link]

Generation Generalities

When It Comes to Gen Z’s Brand Preferences, the Most Important Influencers Are Their Parents by Alyssa Meyers (Morning Consult)

A recent poll shows that the youngest group of Americans are the most likely to take cues on preferred brands across a range of products from their parents. [Link]

It’s time to dispel the biggest myth about millennials by Myles Udland (Business Insider)

An oldie but a goodie from Myles Udland (now at Yahoo! Finance) arguing that Millennials’ preferences were not some sort of landmark departure from the prior American way of life but in fact just the same old story. [Link]

Dystopia

Targeted by Kathleen McGrory and Neil Bedi (Tampa Bay Times)

A detailed investigation of the Pasco County, Florida approach to crime prevention which involved invasive intelligence gathering, aggressive harassment of citizens picked out on an ad hoc basis, and general disregard for civil rights that created more crime than it prevented. [Link]

Amazon Drivers Are Hanging Smartphones in Trees to Get More Work by Spencer Soper (Bloomberg)

Drivers are competing to get orders from Whole Foods’ delivery service by hanging phones in trees near the distribution center which then pass on requests to their devices. [Link; soft paywall]

Learning At Home

Mom’s Hilarious Video Sums Up How Confusing This School Year Is For Everyone by Carolina Bologna (Huffpost)

Faced with massive frustration over the patchwork backdrop of remote and in-person learning, a mom parodied the painful experience of learning online. [Link]

Parents on TikTok mock people with disabilities for the ‘New Teacher Challenge.’ These women are reclaiming their images by Scottie Andrew and Kat Jennings (CNN)

A social media trend that sets up disabled people as the boogeyman and teaches their children to fear those same disabled people is a painful example of how what may seem innocuous fun can be deeply hurtful. [Link]

Hot Back-to-School Items During Coronavirus Are Tents, Webcams by Austen Hufford (WSJ)

Protective products, keyboards, webcams, and tents are all in huge demand as schools struggle to prevent the return of students from creating COVID hotspots. [Link; paywall]

Whales

SoftBank unmasked as ‘Nasdaq whale’ that stoked tech rally by Kana Inagaki, Katie Martin, Robert Smith and Robin Wigglesworth (FT)

In addition to buying the underlying stocks, SoftBank has reportedly bid up the call options of many of its US tech investments in an effort to push up investments even faster; that behavior may explain some of the massive tech rally we’ve seen in recent months. [Link; paywall]

Buffett’s 1977 Letter Hints at Why He Likes Japan Trading Houses by Stephen Stapczynski (Bloomberg)

Recent Berkshire Hathaway purchases in five Japanese conglomerates are in large part explained by his long-term focus on understandable, long-term, and competently run operations which are not extremely expensive. [Link; soft paywall]

Moving

New Yorkers Flee for Florida and Texas as Mobility Surges by Steve Matthews and Alexandre Tanzi (Bloomberg)

While mobility across state lines has sagged in recent years, 2020 is seeing a surge in movement from New York and New Jersey to warmer climates like Florida, Texas, and the rest of the Sunbelt. [Link; soft paywall]

Pandemic Purchases

In a Pandemic, Boats Are No Longer a Bad Investment by Alex Lauer (Inside Hook)

Loaded with operating costs and depreciation, boats have long been viewed as a great way to do away with large quantities of cash. But new and used boat sales have exploded during the pandemic as people look for ways to be outdoors and have some fun without getting on a plane or staying in a hotel. [Link]

Who Profits From Amateurism? Rent-Sharing in Modern College Sports by Craig Garthwaite, Jordan Keener, Matthew J. Notowidigdo, and Nicole F. Ozminkowski (NBER)

New research suggests that college sports effectively transfers resources away from black and lower income students and towards students who are white and higher income. This will not surprise many who have spent time close to college athletics departments. [Link]

Amazon Air

Amazon wins FAA approval for Prime Air drone delivery fleet by Annie Palmer (CNBC)

Drone delivery is now permitted to move forward for Amazon, who joins UPS and Google gaining approval for its automated airborne delivery fleet. [Link]

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Have a great weekend!

Recent economic data has been making a habit of surprising to the upside as the pace of recovery from the pandemic lows has consistently surprised most economists.  While improved, the picture isn’t perfect.  This morning’s non-farm payrolls report, which was better than expected at the headline level, showed a concerning increase in the number of permanent job losses (people looking for work that left their prior job on an involuntary basis).  Also, looking at more real-time indicators of activity like TSA passenger throughput at the country’s airports appears to have leveled off after rising off the lows in May and June. This begs the question, has the low hanging fruit been fully harvested?

In some ways, the answer to this question is yes.  In March and April, pretty much everything shut down.  As awareness of the virus and how to deal with it grew, though, businesses that were little impacted have resumed operations. While those businesses have resumed activity, there are still a number of businesses such as ones in the travel, leisure, beauty, and hospitality sectors that remain weak in part because the demand hasn’t returned but also because government orders prohibit them from re-opening in full or even at all.  As concerns from the public start to ease and restrictions are lifted, these sectors should also start to improve.

While the pace of the recovery has slowed, it doesn’t yet appear to be rolling over.  Take the passenger data in the chart above.  While it appears to have stalled out in the last two months, part of the decline is the result of seasonal factors.  The chart below takes the same data as the chart above but compares the throughput levels to where they were a year ago and shows the y/y percentage change. On this basis, passenger traffic is still down an eye-popping 67% compared to a year ago, but yesterday’s level was actually the highest reading since late March and has actually been accelerating to the upside.  It’s possible that where Labor Day falls on the calendar this year could be impacting the y/y change, so we’ll have to see where things shake out in the next week, but even with that caveat, the pace of air traffic looks better on a y/y basis than on an absolute basis. Like what you see?  Try out a Bespoke subscription to receive our weekly Bespoke Report in your inbox this evening.  Click here to start a two-week free trial now!

Headline statistics from the Bureau of Labor Statistics Employment Situation Report on Friday morning showed further labor market recovery from COVID. But under the surface, August had significant labor market deterioration. While payrolls beat, the unemployment rate fell faster than expected, wages were stronger than expected, and hours worked rose against expectations, the number of Americans who are on permanent layoff (involuntarily unemployed and looking for work) rose by more than 500,000, and their share of the overall labor force is now the same as during the peak of the early-2000s recession.

While the huge drop in temporarily laid-off workers that has been ongoing for several months continued, widening of permanent job loss suggests that the labor market is still deteriorating as businesses close, reduce output, or are forced from re-opening thanks to the ongoing economic impact of COVID. While the headline numbers were welcome, it’s important to understand that they don’t tell the full story. Please note both charts below show data for all periods it is available. For more on the jobs report, try out a Bespoke subscription to receive our weekly Bespoke Report in your inbox this evening.  Click here to start a two-week free trial.