A bull market for bear market indicators


December 5, 2018

The US Treasury’s 2- to 5-year yield curve inverted for the first time since 2007, and… we lost you at “yield curve” didn’t we?
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WTF is an ‘inverted yield curve,’ and what does it mean for the economy?

For the first time since 2007, the 2- to 5-year US Treasury yield curve has inverted. Historically, this has served as a somewhat reliable indicator of economic downturn, which means people are freaking out, which means…

OK, hold up: What exactly is a yield curve, and why is it inverting?

‘Lend long and prosper’ (so say the banks)

In short, a yield curve is a way to gauge the difference between interest rates and the return investors will get from buying shorter- or longer-term debt. Most of the time, banks demand higher interest for longer periods of time (cuz who knows when they’re gonna see that money again?!).

A yield curve goes flat when the premium for longer-term bonds drops to zero. If the spread turns negative (meaning shorter-term yields are higher than longer maturity debt), the curve is inverted

Which is what is happening now

So what caused this? It’s hard to say — but we prefer this explanation: Since December 2015, the Fed has implemented a series of 6 interest rate hikes and simultaneously cut its balance sheet by $50B a month.

According to Forbes, the Fed has played a major part in suppressing long-term interest rates while raising short-term interest rates.

Yield curve + inversion = economic downturn (sometimes)

The data don’t lie. A yield curve inversion preceded both the first tech bubble and the 2008 market crash.

Though, this theory has had some notable “false positives” in its lifetime — so it’s not exactly a foolproof fortune teller.

Heck, IBM found the size of high heels tends to spike during hard times. As of now, the experts who believe the sky to be falling remain in the minority.

@ Me Anything
Wes Schlagenhauf, News Writer at The Hustle
@wesschlagenhauf

2020 headline: “Economists link market strength to the density of teens’ vape clouds”
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The Chive launches its own ‘ambient’ TV platform

The Chive is the latest digital media company to unveil its silver bullet to beat ad-saturation: A new ad platform.

This week, the company debuted “Atmosphere,” a TV channel dedicated to “ambient” video content — visual white noise you can tune in and out to that doesn’t require audio to enjoy.

What started two years ago with a single channel designed for bar TVs and cruise ships is now a full-fledged venture expected to bring in $10m in revenue next year through ads and business subscriptions.

There are 2 kinds of TV in this world:

TV you “tune in to” (prime-time shows and Netflix originals), and TV you “tune out to” (channels like HGTV or ESPN). You know, the kind of shows you put on for your dog when you leave the house.

Atmosphere takes this kind of content to a whole new level, sandwiching ads between syndicated videos from social platforms and other ambient publishers like Cheddar and Fatherly — all of which will be muted by default (no closed captioning necessary).

Independent studies commissioned by The Chive have shown that patrons stay 16% longer in bars that air its content, so it won’t pay for bars to air its channels. And for a $37/month subscription, businesses will be able to insert their own promotions.

It’s very on-brand

Let’s be honest, The Chive’s content has always been more “visual” in nature (e.g., semi-nude women).

Now, it’s getting a family-friendly revamp, with channels featuring sweeping nature footage, workout videos, and “feel-good viral video content.”

» Coming to a lull in conversation near you

The Congolese cobalt conundrum: The most eligible mineral just got even harder to get

The Democratic Republic of the Congo — the central African country that produces the majority of the world’s cobalt — has hiked the price of royalties required to purchase the metal by 3x.

Now, lithium-ion battery barons including Apple, Samsung, BMW, and Volkswagen find themselves saddled with a pricey premium on a mandatory manufacturing material.

If you’ve got it… ruthlessly jack up prices

Since 60% of global cobalt comes from the Congo, mining companies in the DRC knew global buyers had few options. So they did what any self-respecting global commodities trader would do: Increased prices.

After the price of cobalt tripled in just 18 months, major buyers including Apple and Samsung launched direct-to-the-source partnerships with Congolese mining companies this year to ensure continued access to the magic mineral.

Companies are still cuckoo for cobalt

Since cobalt is a crucial component of the batteries that power both smartphones and electric vehicles, major buyers will have to continue buying the marked-up minerals… at least for now.

Some buyers, like Tesla and Panasonic, have committed to reducing reliance on the “blood diamond of batteries” by investing in the development of alternatives such as solid-state and sodium-ion (instead of lithium) batteries.

But since most scientists believe viable alternatives are still about 10 years away, most big buyers will still be riding the cobalt carousel for a while yet.

» Going batsh*t for batteries

Spoiler alert: A manager’s ability to handle stress is a key factor in team performance

As business leaders search high and low for new ways to increase healthy office culture, loyalty, and productivity, studies show they may be missing a pretty basic one: how their managers respond to stress.

A new study by leadership training company VitalSmarts found that 1 in 3 managers can’t handle the heat, and their ineptitude is affecting team performance in a variety of ways.

Productivity doctor recommends taking a chill pill

Anger is never the answer — and according to the study, managers who get angry or withdrawn when the going gets tough hurt team morale, cause missed deadlines, and decrease the quality of work.

A spicy manager can also have a negative effect on individuals over managers who remain calm, cool, and collected when sh*t hits the fan.The report found that individuals on teams led by loose-canagers are:

  • 62% more likely to consider leaving their job.
  • 56% more likely to shut down and stop participating
  • 49% less likely to go above and beyond
  • 47% more likely to be frustrated and angry

This study may seem like it was conducted by Professor Obvious…

But, as the study shows, 53% of managers are more closed-minded and controlling than open and curious, and 45% are more upset and emotional than calm and in control.

In other words, a kind reminder never hurts.

» Goooooze-fraaa-bahh
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“Yeaah, suuure” → deals deals deals

To err is human; to include free shipping divine.

– Louis Bargain from Nipmuc, MA

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