<p><strong><em><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></em></strong></p><p><strong><em>Introducing Cultivated, our new weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom. <a href="http://newsletter.businessinsider.com/join/cultivated">Sign up here</a>.</em></strong></p><p>Happy Friday the 13th everyone (spooky):</p><p>As with last week, the cannabis sector was dominated by the unfortunate news of vaping-related illnesses. As a refresher, I put together a timeline of what state and federal officials knew about the illnesses and when. <a href="https://www.businessinsider.com/timeline-of-vape-related-illnesses-and-deaths-2019-9">You can read that here, and we'll keep updating it as we learn more</a>.</p><p>But there was some other news apart from the vape scare that I'd like to highlight. First, Aurora Cannabis, one of the largest cannabis companies, reported earnings. While the company didn't have a bad quarter revenue-wise, it missed on its guidance by around 1% and the stock was hammered as a result.</p><p>I spoke with Aurora Chief Corporate Officer Cam Battley yesterday by phone. He said a few interesting things. One, he felt like the market has a "follow-the-leader" approach where, after companies like Canopy Growth and Cronos Group did deals with large alcohol and tobacco companies, investors expected Aurora to do the same.</p><p>"There's pressure there," said Battley. "We don't want to give up control and enter partnerships that don't work for us."</p><p>Second, Battley reiterated that Aurora is actively looking at US CBD acquisitions, <a href="https://www.businessinsider.com/aurora-cannabis-will-unveil-plan-to-produce-cbd-for-us-market-2019-1">which we have reported on in the past</a>. He also said that Aurora is looking closely at the landmark Canopy Growth-Acreage deal, and may consider pursuing a similar acquisition under that framework. We <a href="https://www.businessinsider.com/canopy-growth-acreage-holdings-deal-will-open-up-the-market-says-lawyer-2019-4">previously reported that the deal's unique (if vague) structure would provide a pathway</a> for other Canadian cannabis companies to do the same. </p><p>On the policy front, House Majority Leader Steny Hoyer told the Democratic caucus that <a href="https://www.marijuanamoment.net/marijuana-banking-bill-will-get-a-full-house-floor-vote-this-month-sources-say/">a bill to protect banks that serve cannabis companies will get a full House floor vote</a> by the end of the month. The news follows Senate Banking Committee Chairman Mike Crapo's <a href="https://www.politicopro.com/">statement to Politico</a> that his committee will hold a vote on similar legislation.</p><p>In other news, I sat down with Bradley Tusk, the CEO of Tusk Ventures and author of "The Fixer" in his Manhattan offices on Wednesday to tape an episode of <a href="https://www.firewall.media/">The Firewall podcast</a>. We had a wide-ranging discussion that went from cannabis tech startups to psychedelic drugs, and Mexico's incipient cannabis legalization - all in a snackable 20 minutes. The episode will drop on Wednesday, and you can listen to it wherever you get your podcasts.</p><p>And last, here's a tidbit I thought you all might like. I spoke with Marc Hauser, who leads the law firm Reed Smith LLP's cannabis practice earlier today.</p><p>He had a great quote around the regulatory complexity of cannabis and the challenges of putting together deals. "It's both legal and highly regulated at the state level, and highly illegal at the federal level," Hauser told me. "It's like a quantum physics problem."</p><p><em>-Jeremy </em></p><p><strong><em>More stories from around the BI newsroom:</em></strong></p><section><h3><a href="https://www.businessinsider.com/k-zen-5-million-seed-round-pitch-deck-dcm-ventures-2019-9">Here's the pitch deck that cannabis-beverage startup K-Zen used to raise $5 million from seasoned Silicon Valley VC firm DCM Ventures</a></h3><p><a href="https://www.businessinsider.com/top-investors-say-these-marijuana-startups-will-blow-up-2019-5">The cannabis-infused-beverage startup</a> K-Zen raised $5 million from the venerable Silicon Valley venture firm DCM Ventures in May.</p><p>K-Zen co-CEO Judy Yee told Business Insider that the startup tailored its fundraising approach to investors who would be willing to invest in cannabis, as <a href="https://www.businessinsider.com/how-big-vc-firms-are-making-their-first-cannabis-investments-2019-8">most mainstream venture funds are still reticent about the space</a>.</p><p>Yee walked me through K-Zen's pitch deck and talked about the genesis of K-Zen in a recent interview. </p><section><h3><a href="https://www.businessinsider.com/top-marijuana-stocks-to-invest-cowen-vivien-azer-2019-9">Here are the 3 top pot stocks to bet on in the US and one to avoid, according to Wall Street's leading cannabis analyst</a></h3><p>Wall Street's star <a href="https://www.businessinsider.com/latest-cannabis-business-news-2019-6">cannabis-industry</a> analyst Vivien Azer initiated coverage on some of the splashiest US cannabis names - known as multistate operators or MSOs in industry parlance - including <a href="https://www.businessinsider.com/curaleaf-is-acquiring-grassroots-cannabis-for-875-million-2019-7">Curaleaf</a>, <a href="https://www.businessinsider.com/green-thumb-industries-acquires-beboe-for-undisclosed-amount-of-stock-2019-2">Green Thumb Industries</a>, <a href="https://www.businessinsider.com/marijuana-retailer-cresco-labs-to-buy-origin-house-for-825-million-2019-4">Cresco Labs</a>, <a href="https://www.businessinsider.com/canopy-growth-acreage-holdings-deal-will-open-up-the-market-says-lawyer-2019-4">Acreage Holdings</a>, and <a href="https://www.businessinsider.com/medmen-ceo-talks-about-whats-next-biggest-cannabis-company-in-us-2018-10">MedMen</a>.</p><p>Azer's <a href="https://www.businessinsider.com/top-marijuana-stocks-to-invest-cowen-vivien-azer-2019-9">top US cannabis pick</a>: Green Thumb Industries. She also likes Curaleaf and Cresco Labs, particularly as these companies balance wholesale and retail revenues.</p><p>She put a harsh price target on MedMen - $1.50. While she said the brand has strong equity in the lucrative California market, the company's constant need for cash and rampant spending will hurt it in the longterm. </p></section><section><h3><a href="https://www.businessinsider.com/how-to-make-a-successful-pitch-according-to-investors-2019-9">Top investors from a cannabis-focused fund and early Juul investor share their 3 best tips for making a successful pitch</a></h3><p>Brother-and-sister-duo Morgan and Emily Paxhia know what turns a pitch into funding for a startup.</p><p>As the managing partners of <a href="https://www.businessinsider.com/poseidon-asset-management-raising-75-million-for-marijuana-focusd-fund-ii-2018-12">Poseidon Asset Management, a cannabis-focused investment firm</a>, the pair have seen - and sat through - tons of pitches of varying quality. The two shared their best pieces of advice for startup founders looking to make a successful pitch <a href="https://www.businessinsider.com/webinar-headset-ceo-walks-through-successful-series-a-pitch-deck-2019-9">in a recent webinar moderated by Business Insider</a>.</p><p>Check out their three best tips <a href="https://www.businessinsider.com/how-to-make-a-successful-pitch-according-to-investors-2019-9">here</a>. </p></section></section><h2>Capital raises, M&amp;A activity, partnerships, and launches</h2><ul><li><a href="https://www.prnewswire.com/news-releases/newlake-announces-85-5-million-capital-raise-for-newly-formed-real-estate-company-300916162.html">NewLake Capital Partners raised an $85.5 million private placement</a>. It's a real estate play, according to the press release: the company will focus on acquiring specialized industrial and retail properties to be leased to state-licensed cannabis operators.</li><li>The Department of Justice's Antitrust Division <a href="https://www.businessinsider.com/marijuana-retailer-medmen-acquires-pharmacann-for-682-million-2018-10">allowed MedMen's $682 million all-stock transaction of PharmaCann</a> to go through. It's a good sign for the industry, as the DOJ is reviewing the recent spate of mega-mergers under the Hart-Scott-Rodino Antitrust Improvements Act (HSR). </li><li>Israeli cannabis company Canndoc, a subsidiary of InterCure, <a href="https://www.biospace.com/article/releases/intercure-canndoc-signs-strategic-distribution-agreement-with-s-l-e-of-teva-pharmaceuticals/">signed a deal with a subsidiary of generic drug manufacturer Teva Pharmaceuticals</a> to distribute medical cannabis products in Israel and internationally.</li><li>Cannabis e-commerce platform <a href="https://www.prnewswire.com/news-releases/dutchie-leading-online-cannabis-marketplace-secures-15-million-series-a-round-300915668.html">Dutchie closes a $15 million Series A led by Gron Ventures</a>. Backers include Snoop Dogg's Casa Verde Capital and Kevin Durant's Thirty Five Ventures. I'll be chatting with Dutchie's CEO, Ross Lipson, on Monday.</li><li><a href="https://www.prweb.com/releases/mgo_acquires_new_york_based_cpa_firm_schwartz_company/prweb16568079.htm">MGO LLP acquires New York City accounting firm Schwartz &amp; Company</a> to serve cannabis industry clients. MGO LLP is part of the MGOELLO network. The firm <a href="https://www.businessinsider.com/wall-street-alumni-launch-ello-capital-for-cannabis-ma-deals-2019-7">recently launched Ello Capital</a>, a boutique advisory that helps cannabis companies fundraise. </li><li>UK-based medical cannabis and CBD company <a href="https://finance.yahoo.com/news/uk-medical-cannabis-cbd-company-182024190.html">Cannaray closed a $9.7 million Series A</a>. The company touts its aggressive, "Brexit-proof" expansion strategy in the announcement. </li><li>Cannabis REIT Innovative Industrial Properties closed on a four-property portfolio in Southern California in a $17.3 million deal.</li><li>Canivate Growing Systems Ltd, which has raised $10.8 million, launched this week. <a href="https://www.prnewswire.com/news-releases/canivate-launches-with-plans-to-establish-new-standard-for-clean-green-and-pure-cannabis-and-hemp-cultivation-300914655.html">The company touts its cannabis growing technology</a>, which reduces the amount of water and other resources to grow cannabis. </li><li>Medicine Man Technologies enters into an agreement to acquire Strawberry Fields, a Colorado cannabis cultivator, in a $31 million cash-and-stock deal.</li><li>Tilray <a href="https://finance.yahoo.com/news/tilray-sell-400m-shares-via-135511973.html">entered into an agreement with Cowen</a> to sell up to $400 million shares. </li><li>On the media front, Politico's subscription business, Politico Pro, <a href="https://www.politicopro.com/federal/cannabis">launched a new vertical focused on federal and state cannabis policy</a>, along with a morning newsletter. </li></ul><h2>Executive moves</h2><ul><li>Canopy Rivers, the VC arm of Canopy Growth, <a href="https://www.newswire.ca/news-releases/canopy-rivers-launches-strategic-advisory-board-885533822.html">formed a new strategic advisory board</a>. The board includes John Ruffolo, formerly the founder of OMERS Ventures, Meg Lovell, formerly M&amp;A head at Imperial Brands PLC, and Philip Donne, formerly the CEO of Kellogg Canada.</li><li>Brad Kotansky, a former banker and entrepreneur, <a href="https://4frontventures.com/2019/09/4front-expands-finance-team-with-new-cfo-other-key-appointments/">joins 4Front as CFO</a>.</li><li>48North Cannabis <a href="https://www.newswire.ca/news-releases/48north-provides-update-on-executive-team-857430217.html">names Alison Gordon as the sole CEO</a>. The company accepted the resignation of Gordon's co-chief executive, Jeannette VanderMarel this week. VanderMarel will stay on as board director.</li><li>Green Flower Media adds Gil Christie as EVP of Enterprise Solutions &amp; Investor Education. Christie previously founded Fitch Learning. </li><li>California cannabis chain Caliva adds Jeffry Allen to its board. The company also adds Joseph Sequenzia as chief marketing officer, Leann Taylor as chief strategy officer, and Drew Kornreich as chief M&amp;A officer.  </li></ul><h2>Chart of the week</h2><p>Here's a list of the cannabis companies that are hiring the most this year, from the job recruiting site Indeed. As a reminder, we <a href="https://www.businessinsider.com/how-to-get-a-job-in-cannabis-according-to-top-recruiters-2019-9">published a recruiter's guide to landing a job in the cannabis industry</a> last week:</p><p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><h2>Stories from around the web</h2><ul><li><a href="https://www.politico.com/story/2019/09/13/crapo-cannabis-banking-vote-1729925">Crapo plans landmark cannabis banking vote</a> (Politico)</li><li><a href="https://cannabiswire.com/2019/09/06/indigenous-canadians-grapple-with-the-future-of-cannabis/">Indigenous Canadians grapple with the future of cannabis</a> (Cannabis Wire)</li><li><a href="https://www.npr.org/2019/09/05/757882048/scientists-unveil-weed-breathalyzer-launching-debate-over-next-steps">Scientists unveil weed breathalyzer, launching debate over next steps</a> (NPR)</li><li><a href="https://www.bloomberg.com/news/articles/2019-09-13/pot-s-illicit-history-makes-patenting-hard-in-the-legal-weed-era">Pot's illicit history makes patenting hard in the legal-weed era</a> (Bloomberg)</li><li><a href="https://www.theglobeandmail.com/robcannabispro/article-legal-cannabis-packaging-still-struggling-with-sustainability-issues/">Legal cannabis packaging still struggling with sustainability</a> (The Globe and Mail) </li></ul><div><div id="piano-inline-content-wrapper" data-piano-inline-content-wrapper=""><p><em>Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter <a href="https://twitter.com/jfberke?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">@jfberke</a></em></p></div></div><p class="tagline"><a href="https://www.businessinsider.com/intelligence/digital-health?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_subscription&amp;itm_content=health&amp;itm_campaign=digital-health-3"></a></p>

CULTIVATED: DCM Ventures makes a bet on cannabis drinks, Wall Street's leading cannabis analyst on her top 3 US picks, and more

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Jonathan Leibson/Getty Images</span></p><p class="caption">Kayne West has partnered with Adidas since 2015.</p></div><p></p></div></div></p><ul><li><strong><a href="http://www.businessinsider.com/category/kanye-west">Kayne West</a> has been on a <a href="https://twitter.com/KAYNEIWEST">Twitter</a> rampage this week coming out in support of Trump and making announcements about the <a href="http://www.businessinsider.com/kanye-west-says-yeezy-is-hiring-160-people-this-year-will-hit-a-billion-dollars-2018-4">success</a> of his footwear and apparel brand <a href="http://www.businessinsider.com/category/yeezy">Yeezy</a>.</strong></li><li><strong>Analysts say that the statements he made about the growth of his brand may be overblown.</strong></li><li><strong>Despite this, Yeezy is now considered to be one of the most influential sneaker brands. </strong></li></ul><p>Kayne West has been on a Trump-style <a href="https://twitter.com/KAYNEIWEST">Twitter</a> rampage this week coming out in support of the President, posting photos of himself in a "Make America Great Again" baseball cap, and waxing lyrical about his footwear and apparel brand Yeezy.</p><p>The <a href="https://yeezysupply.com/collections/new-arrivals-footwear">Yeezy</a> brand, which sells apparel and sneakers created in collaboration with Adidas, is facing a <a href="http://www.businessinsider.com/kanye-west-fans-threaten-to-sell-yeezy-shoes-after-trump-tweets-2018-4">backlash</a> online with customers threatening to burn or sell their Yeezy sneakers and celebrities including <a href="http://www.businessinsider.com/all-the-music-artists-and-stars-who-unfollowed-kanye-west-on-twitter-2018-4">Rihanna and Drake</a> reportedly have stopped following West on Twitter.</p><p>West's announcements about his brand's success have also gained attention after he claimed it is on track to "hit a billion dollars" this year and will be hiring 160 people.</p><p>"It is the 2nd fastest growing company in history," West wrote. "It is a unicorn on its way to becoming a decacorn," he said, using  Silicon Valley buzz words which describe a business that is valued over $1 billion and over $10 billion. </p><p>West followed his announcement with <a href="https://twitter.com/kanyewest"><span>a series of tweets</span></a>, claiming that he is "currently the single highest paid person in footwear" and makes more money on shoes than Michael Jordan. </p><p>He then posted: "There's been a lot of fake news so I just wanted to give you the facts. Yeezy will become the biggest apparel company in human history."</p><h2>Yeezy's real value is hard to determine</h2><p>As the company does not release sales data and it is not split out by Adidas, it's almost impossible to determine whether his statements are correct. Adidas would not provide any financial specifics related to Yeezy to Business Insider. </p><p><span><a href="https://www.gq.com/story/kanye-west-yeezy-twitter-claims-fact-check">GQ's Cam Wolf</a></span> spoke to Cowen <keyword id="6354851" type="UNKNOWN" weightage="100" keywordseo="retail">retail</keyword> analyst John Kernan, who covers Adidas, to find out whether any of West's claims hold true. </p><p>"I find it hard to believe it's generating over a billion in sales," Kernan told GQ.</p><p>Wolf explained that Yeezy would need to pull in $3 billion in sales annually to reach this number, which works out as almost 8% of Adidas' entire global business.</p><p>According to Kernan, it's also unlikely that West is making more than Michael Jordan has with Nike.</p><p>"I'm not sure what the economics are for [Jordan] at Nike, and I don't know what Kanye's economics are but it's hard for me to believe it's anywhere near what Nike's on the hook for with Jordan," he told GQ. </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Facebook/Adidas Yeezy</span></p><p class="caption">Yeezy Boost 350.</p></div><p></p></div></div></p><h2>Yeezy is an influential sneaker brand</h2><p>These potentially exaggerated claims shouldn't diminish the success of the brand, however. This week, it was ranked in ninth place in a list of the "hottest brands" created by the <a href="https://www.businessoffashion.com/articles/sponsored-feature/the-truth-about-vetements-and-fashions-hottest-brands-and-top-selling-products-in-q1">Business of Fashion</a> and fashion search platform <a href="https://www.lyst.com/">Lyst</a><span>.</span></p><p>"Streetwear insiders believe the brand could enter the Top 3 Hottest Brands before the year is out," the index noted. </p><p><span>"Sneakers remain the most searched for Yeezy item worldwide. This quarter the Yeezy Blush 500 and the Yeezy </span><span>Boost 700 were the most wanted styles" during the first quarter of 2018, Katy Lubin, a communications director at Lyst, told Business Insider.</span></p><p>West has also been credited with paving the way for some major trends in the sneaker industry. GQ deemed its Boost 350 shoes, which were first released in 2015, as the most <a href="https://www.gq.com/story/yeezy-boost-sneaker-350-design-influence">influential sneakers of 2016</a> and claimed that smaller labels such as <a href="http://www.businessinsider.com/allbirds-has-new-shoes-made-from-eucalyptus-trees-2018-3">Allbirds</a> seemed to take influence from them.</p><p>West has also been at the forefront of the ugly fashion trend, along with Balenciaga and Louis Vuitton. He's outsmarted industry leaders such as Adidas who have been slow to jump on this movement, announcing the launch of its new "dad shoe" this <a href="http://www.businessinsider.com/adidas-is-launching-a-new-dad-shoe-for-the-summer-2018-4"><span>week.</span></a> This is expected to hit stores in June 2017. ￼</p><h2>Kanye is a marketing genius</h2><p>One of West's biggest strengths is his method of rolling out products in limited numbers. These build hype and sell out quickly. One hour after the Boost 350 sneakers went on sale for $200, for example, they were <a href="http://www.businessinsider.com/kanye-west-adidas-yeezy-boosts-sold-out-ebay-2015-8">sold out</a> in stores and online.</p><p><span>"Kanye is a master of social media hype. He's used his personality, plus smart scarcity and exclusivity models to build a cult brand," Lubin said. </span></p><p>Because of this, his sneakers have also become an expensive commodity on the resale market. In 2015, the <span>Yeezy Boost 750 in Triple Black was the highest selling sneaker in resale, selling on eBay for an average of $1,876, according to a <a href="http://www.businessinsider.com/this-was-the-most-valuable-sneaker-of-2015-2016-2">survey</a> done by fashion and sneaker blog <a href="http://www.highsnobiety.com/2016/02/01/most-expensive-sneakers-2015/">High Snobiety</a> and Campless, a database for sneaker resellers.</span> In fact, Kanye and Adidas' Yeezy collection accounted for six of the top 20 most valuable sneaker spots.</p><p>Another of West's assets is his unique marketing strategy.</p><p>West's wife Kim Kardashian West was at the center of his most recent <a href="http://www.businessinsider.com/paris-hilton-dressed-up-like-kim-kardashian-yeezy-2018-1?r=UK&amp;IR=T"><span>Yeezy 6 season campaign</span></a> - she stepped out in the new collection and was photographed by the press.</p><p>Kayne West then recruited a series of social media influencers and celebrity Paris Hilton to dress in the same outfits as Kim and recreate the paparazzi images of her. These were then posted them to their own social media pages.</p><p>According to Lyst, the hype from his social media campaign provoked a 45% spike in search demand for Yeezy on its platform in the week after it appeared versus the week before. </p><p>"The Yeezy team is embedded into culture - art as well as pop - and are not afraid to play with those codes in their marketing efforts," Quynh Mai, Founder of digital agency <a href="http://www.movingimageandcontent.com/"><span>Moving Image &amp; Content,</span></a> the branding agency behind the official films created for the launch of his Season 1, 2, and 3 collections, told Business Insider. </p><p>This direct to consumer advertising tactic not only saves marketing dollars, but is also a way to bring his products to the masses. </p><p>"Yeezy's marketing approach is effective because it balances exclusivity (art, celebrities) alongside mass (Instagram, movie theaters). His campaigns are creative artistic expressions while his distribution strategies are mass," Mai said. </p><p class="tagline"><a href="http://www.businessinsider.com/intelligence/next-frontier-in-customer-relations?IR=T&amp;utm_source=businessinsider&amp;utm_medium=ctgr&amp;utm_term=ctgr_leadgen&amp;utm_content=mobile_ctgr_leadgen&amp;utm_campaign=mobile_ctgr_leadgen_messaging-apps-crm"></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/warren-buffett-million-dollar-charity-lunches-smith-and-wollensky-2018-4">The story behind Warren Buffett's million dollar charity lunches at Smith &amp; Wollensky</a></h3>        <div>                    </div>    </div>

Kanye West's secret to building a footwear empire to compete with Nike

<p></p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>Dave McClure, one of Silicon Valley's top small or "angel" investors, just chimed in <a href="https://twitter.com/davemcclure/status/575738317293121536">via Twitter</a> on the debate whether we're in <a href="http://www.businessinsider.com/tech-bubble-predictions-since-2004-2015-2">a tech bubble</a>.<p>His verdict?</p><p>"It might not be a bubble, but sure as hell the rent is too high."</p><p>He's complaining that founders at very young startups, like the ones his company <a href="http://500.co/">500 Startups </a>invests in, expect ridiculous valuations.</p><p>Then they balk at terms that are meant to protect small investors in case of an early exit.</p><p>This means higher risk for small investors like him.</p><p>Here's the Twitter stream, complete with McClure's typically colorful language.</p><div><div></div></div><div><div></div></div><div><div></div></div><div><div></div></div><p class="embed-spacer"></p><div><div></div></div><div><div></div></div><div><div></div></div><div><div></div></div><div><div></div></div><p>&#xa0;</p><p>In a phone call with Business Insider, McClure explained further that some founders are expecting companies with no revenue to be valued at $5 to $10 million, and they're not agreeing to clauses that guarantee a 2X return on debt-based investments in case of an early exit.</p><p><span style="line-height: 1.5em;">Those clauses protect investors like McClure in case of an early "acqui-hire" type acquisition where a company buys a startup mainly for its founding team. In those cases, the acquiring company often tries to steer more money to the founders to keep them around for a while, and early investors can end up with no return.</span></p><p><span>"We've seen it multiple times," says McClure. "The founders have a half-million payday in compensation or in stock. It's a sweet deal for founders, but it's not a meaningful return at all for investors."</span></p><p>(Note that this is different from a "super liquidation preference," which some bigger investors insist on. In those cases, equity investors insist on a guaranteed 2x return in case of an exit - so, for instance, if they invested $10 million, they would get $20 million upon a sale, even if the company only sold for $20 million. Founders are generally advised to avoid such deals if possible, as it can leave them with nothing from a big exit.)</p><p>The long and short of it is that McClure sees increased risk for small investors.</p><p>"A<span>cross the board, people are coming in with higher cap valuations, raising at the top end of the range. A lot of people are raising above 5 million caps with no metrics.... I don't think that's a healthy environment. You're gonna lose money."</span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/police-car-chase-weed-toss-marijuana-pot-arizona-2015-3">Incredible dash-cam video of a car chase shows suspects tossing bales of weed out the window</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="xvZnJ2czo4we8mdgZESZ2DxeaFMmxz9w" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Top Silicon Valley angel: 'It might not be a bubble, but sure as hell the rent is too high'

<p>Good morning, AdLand. Here's what you need to know today:</p>
<p><strong>Samsung</strong> <a href="http://www.campaignlive.co.uk/news/1291084/samsung-calls-global-advertising-media-review/">is putting its global advertising and media accounts</a> up for review, Campaign reports. The global ad account is split between Cheil, CHI &amp; Partners and Leo Burnett. Samsung has a lot of agencies on its roster, and the plum assignments are in the U.S. and Korea. Nonetheless, this is a hugely prestigious and potentially lucrative account on one of the world's hottest brands. Expect drama!</p>
<p>Viral marketer <strong>Poo-Pourri</strong>, whose <a href="https://www.youtube.com/watch?v=ZKLnhuzh9uY&amp;list=UUWks4qtrESbtEvrTy0Qt9mQ">last video</a> for its odor-masking spray was viewed more than 26 million times on YouTube, is back with another ad in which its smooth-talking female spokesperson speaks frankly about pooping. Only <a href="https://www.youtube.com/watch?v=7aJTxUf4i84">this time</a>, she's taking her boyfriend to task for his bathroom transgressions.</p>
<p></p>
<p><strong>Facebook</strong> reported revenues of $2.5 billion, up 72%, but Business Insider's Jim Edwards thinks the company <a href="http://www.businessinsider.com/facebook-q1-earnings-2014-4">is headed for a period of slow growth</a>. CEO Mark Zuckerberg and COO Sheryl Sandberg said they don't expect autoplay video ads and Instagram ads to be significant parts of the revenue stream in the immediate future.</p>
<p>CP+B's LA office was tapped to <a href="http://www.mediabistro.com/agencyspy/cpb-partners-with-2k-for-nba-2k-franchise_b64551">launch the next version</a> of the popular <strong>NBA 2K</strong> video game series, NBA 2K15.</p>
<p>Chicago's tourism marketing organization, <strong>Choose Chicago</strong>, <a href="http://www.mediabistro.com/agencyspy/choose-chicago-names-fcb-chicago-starcom-usa-agencies-of-record_b64532">selected FCB Chicago as its new creative agency of record</a> and the Chicago office of Starcom USA as its media buying and planning agency.</p>
<p>In <a href="http://www.adweek.com/news/technology/75-mobile-video-ads-happen-app-157217">a new study</a>, the <strong>Mobile Marketing Association</strong> found that 75% of video ads are served in apps.</p>
<p><strong>Wieden+Kennedy</strong> <a href="http://www.mediabistro.com/agencyspy/wk-names-colleen-decourcy-as-partner_b64561">named global coexecutive creative director Colleen DeCourcy partner</a>. DeCourcy joined W+K in early 2013 from Socialistic, a social media content and design agency she founded.</p>
<p><strong>R/GA</strong> hired Robyn Tombacher to be svp, business operations. Tombacher joins from DigitasLBi, where she was svp, global operations director.</p>
<p><strong>Previously on Business Insider <keyword id="35666" type="COMPANY" weightage="100" keywordseo="advertising">Advertising</keyword>:</strong></p>
<ul>
<li><a href="http://www.businessinsider.com/critics-hijack-mynypd-twitter-hashtag-2014-4">The NYPD Promoted Itself On Twitter, And Twitter Filled Up With These Images Of Police Brutality</a></li>
<li><a href="http://www.businessinsider.com/pepsi-challenge-business-insider-2013-5">We Recreated The Pepsi Challenge To See What People Really Like</a></li>
<li><a href="http://www.businessinsider.com/ronald-mcdonald-is-getting-a-makeover-2014-4">Ronald McDonald Is Getting A Makeover, And He's Coming To Twitter</a></li>
<li><a href="http://www.businessinsider.com/subarus-brilliant-dash-cam-commercial-2014-4">This Russian Subaru Commercial Is A Dash Cam Parody Featuring A Brilliant Dog</a></li>
<li><a href="http://www.businessinsider.com/facebook-q1-earnings-2014-4">Facebook Earnings: The Social Network Enters A New Era Of Slow Growth<br /></a></li>
<li><a href="http://www.businessinsider.com/wechat-attacks-mark-zuckerberg-facebook-ad-2014-4">WeChat Attacks Mark Zuckerberg By Name In New Ad</a></li>
<li><a href="http://www.businessinsider.com/vh1-psa-says-being-bullied-isnt-so-bad-2014-4">A New Anti-Bullying Ad Doesn't Actually Encourage People To Stop Bullying</a></li>
<li><a href="http://www.businessinsider.com/the-7-most-common-ways-were-tricked-into-overeating-2014-4">The 7 Most Common Ways We're Tricked Into Overeating</a><br /><br /></li>
</ul>

Samsung's Global Ad Account Is Up For Grabs [THE BRIEF]

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Kacper Pempel</span></p></div><p></p></div></div>Tech stocks got slammed, bank stocks got slammed, Greek stocks got slammed, and <a href="http://www.businessinsider.com/gold-price-surge-2016-2016-2">gold (!) rallied</a> to start the trading week.</p><p>Stocks in Europe got buried on Monday and US equities followed their lead, opening sharply lower and finding no bounce during the day until the final hour when a frantic rally saw stocks gain back about half their earlier losses.</p><p>First, the scoreboard:</p><ul><li>Dow: 16,027.1, -177.9, (-1.1%)</li><li>S&amp;P 500: 1,853.4, -26.6, (-1.4%)</li><li>Nasdaq: 4,283.8, -79.4, (-1.8%)</li><li>WTI crude oil: $30.10, -2.5%</li></ul><h2>Stocks, crushed (sort of)</h2><p>Stocks got slammed on Monday (note: this is an improvement over the "absolutely destroyed" language originally warranted) with the Dow falling about 180 points, the S&amp;P 500 losing more than 1.4%, and the Nasdaq falling by 1.8%. </p><p>This drop in tech stocks followed the <a href="http://www.businessinsider.com/linkedin-earnings-q4-2016-2">truly stunning 45% decline</a> in LinkedIn shares on Friday which followed a disappointing quarterly report from the professional social network.</p><p>Yelp <a href="http://www.businessinsider.com/yelp-earnings-q4-2015-2016-2">reported earnings during the day on Monday</a> in a release the company said was accidentally distributed by PR Newswire and although its results were in-line with expectations, Yelp shares lost 12% on Monday. Yelp shares, we'd note, had been down by about this much before the earnings leaked, and so the reaction to these numbers was basically nothing from the market.</p><p>"Sell (almost) everything" was more or less the day's theme as it seems to have been for much of the year.</p><p>Related: stocks have lost over $6 trillion in value this year alone. </p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>Deutsche Bank</span></p></div><p></p></div></div></p><h2>CoCo</h2><p>As market rallies get tired and investors start looking for the cracks in the foundation, ever-more-complex financial products seem to emerge from the woodwork. </p><p>Enter contingent convertible capital instruments, or "<a href="http://www.businessinsider.com/deutsche-bank-shares-hit-record-low-2016-2">CoCos</a>."</p><p>CoCos are junior bonds issued largely by European banks as a way to meet regulatory capital requirements. </p><p>The Bank for International Settlements <a href="http://www.bis.org/publ/qtrpdf/r_qt1309f.pdf">has a great primer</a> on the topic which was widely circulated on Monday as questions swirled about some of Deutsche Bank's CoCo's. The simplest way to think about them is like this: a CoCo is a bond that can become either become stock or have its value written down when the issuer's capital falls below a certain level. Said another way, CoCos are loss-absorbing capital. In exchange for this risk investors, get, well higher returns. </p><p>Here's a nice flowchart on how CoCos become stocks or written-down bonds:</p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>BIS</span></p></div><p></p></div></div></p><p>In the case of Deutsche Bank's CoCo in question, for example, the bond carries a coupon of 7.5% paid in perpetuity. Questions arose about the firm's ability to continue paying this coupon beyond 2016, with a <a href="http://www.bloomberg.com/news/articles/2016-02-08/deutsche-bank-s-woes-threaten-coco-coupons-creditsights-says">report from CreditSights</a> casting doubt on the bank's ability to make payments as soon as next year.</p><p>In a <a href="https://www.db.com/newsroom_news/2016/medien/deutsche-bank-publishes-updated-information-about-at1-payment-capacity-en-11385.htm">statement</a> Deutsche Bank said, it expects to have €1 billion available for CoCo payments this year, more than enough to meet its April obligation, and will have €4.3 billion available next year. How large the firm's CoCo obligation will be next year is less clear.</p><p>The first rule of Additional Tier 1 payment capacities, of course, is that you don't talk about Additional Tier 1 payment capacities. (Not actually.)</p><p>So but the point here is that most people woke up on Monday and hadn't heard of CoCos but then spent a lot of the day reading or thinking about them. Which is sort of how things go in markets: one day your capital structure is followed only by regulators, analysts, some focused shareholders, and your board. The next day, we're writing about it.</p><h2>Chesapeake</h2><p>Carl Icahn <a href="http://www.businessinsider.com/icahn-loses-on-chesapeake-energy-2016-2">had a terrible day</a> as shares of Chesapeake Energy - of which he owns 73 million - fell more than 30% <a href="http://www.businessinsider.com/chesapeake-share-price-february-8-2016-2">following reports</a> the company had hired bankruptcy lawyers. </p><p>In a statement on Monday following the news, which was first reported by Debtwire, the company said it, "has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders."</p><p>Chesapeake also noted that Kirkland &amp; Ellis, the firm Debtwire reported had been brought on by Chesapeake to restructure its debt, has served as counsel since 2010.</p><p>Chesapeake shares are down about 90% in the last year and as oil prices - which fell another 3% on Monday to trade back below $30 a barrel - continue to trade at a massive discount to prices about 18 months ago the market is still waiting for the first big oil bust bankruptcy.</p><h2>Greece</h2><p>Greek <a href="http://www.businessinsider.com/greece-torn-between-creditors-and-greeks-2016-2">stocks crashed on Monday</a> as the Athens Stock Exchange closed at its lowest level since 1990 after falling 7.9% fot the session. Greek bank stocks bore the brunt of this decline, falling 24.3%.</p><p>And so not only has been some time since we last heard from Greece but the whole idea is that the latest bailout agreed to last summer had gotten the whole thing fixed. Obviously not.</p><p>Right now Greece is facing an increasingly untenable situation on the ground as its government continues to negotiations with international creditors - including the ECB and the IMF - over measures including pension reform, and there are growing concerns these talks could stall. Meanwhile, Greece's citizens aren't happy about this austerity push, meaning that <em>even if</em> Greece's talks at the international level go well any agreements could stoke further discontent at home.</p><p>Rock, hard place.</p><h2>The Fed</h2><p>It's a pretty quiet week for the US economy with Federal Reserve Chair <a href="http://www.businessinsider.com/monday-scouting-report-february-8-2016-2">Janet Yellen's appearance</a> on Capitol Hill Wednesday and Thursday serving as the main events. Markets will look for any clues about the Chair's feeling on whether the Fed will be inclined to raise rates at its March meeting, though economists - <a href="http://www.businessinsider.com/market-fed-raise-rates-in-2017-2016-2">not to mention the market</a> - see this as increasingly unlikely.</p><p>Joe LaVorgna, chief economist at Deutsche Bank, <a href="http://www.businessinsider.com/deutsche-bank-gdp-and-rate-hike-forecasts-2016-2">wrote in a note to clients</a> over the weekend that March is decidedly off the table, adding that the Fed won't be raising rates until December 2016.</p><p>"We do not expect the Fed to raise rates in March because Q1 GDP growth will likely be very soft, and policymakers will need more time to gauge whether financial conditions will weigh more extensively on economic activity," LaVorgna wrote. "A rate hike in June or September would probably require growth and inflation to rebound much more than we currently project. Therefore, a rate hike in December seems most likely."</p><p>LaVorgna also expects the economy will grow 1.3% in 2016, less than the 2% he had been expecting. </p><p>Contra LaVorgna's downgraded outlook, Neil Dutta at Renaissance Macro said that in his view economic data points to conditions that are likely to be more inflationary than most Wall Street forecasters are expecting. </p><p>"If we take the data at face value, productivity growth is anemic," Dutta wrote. "Weak productivity growth with an economy at or near full employment is inflationary, speeding the Fed up, not slowing it down. My view is that forecasts for delayed tightening should be made on risk management grounds not economic ones."</p><p>This is more or less the "third mandate" or "financial stability" argument that in addition to working towards full employment and price stability the Fed ought not to be the source of major market events. </p><h2>The stock market is not the economy </h2><p>David Rosenberg at Gluskin Sheff wrote in a note to clients on Monday that, "what is bothering the stock market these days has little to do with the economy - despite the constant narrative to the contrary."</p><p>This pushes back on a popular pro-recession narrative that falling stock prices will hurt consumer confidence, leading to consumers re-trenching, economic activity seizing up, and a market foretold prophecy coming true. </p><p>Rosenberg isn't so sure. And in fact, he's pretty sure the market has itself confused anyway.</p><p>"Think about it," Rosenberg wrote. "The two best performing assets classes this year are bonds - a hedge against deflation - and gold - a classic hedge against inflation. No wonder the stock market is having a fit - deflation hits profits hard; inflation brings the Fed back into play." </p><p>And so investors seem to be most worked up about about two distinct issues both of which have wildly different implications for the actual economy though neither of which appear to be credible responses to any economic changes.</p><p>The <a href="http://www.businessinsider.com/us-jobs-report-january-2016-2016-2">January jobs report</a> showed a labor market in the US that remains in solid shape while GDP growth continues to be of the not-great-but-not-terrible variety. Same as it ever was.</p><h2>Additionally</h2><p>Here is a <a href="http://www.businessinsider.com/chart-of-doom-explains-when-a-global-recession-will-begin-2016-2">chart of doom</a>.</p><p>Bill Ackman will host <a href="http://www.businessinsider.com/ackman-to-host-herbalife-webcast-2016-2">yet another webcast about Herbalife</a> on Tuesday. </p><p>Verizon is <a href="http://www.businessinsider.com/aol-ceo-tim-armstrong-is-expected-to-lead-verizons-talks-with-yahoo-2016-2">thinking about buying Yahoo</a> and Tim Armstrong - who is in charge of AOL and like Yahoo CEO Marissa Mayer is a Google alum - is leading the talks. </p><p>David Zervos thinks Mario Draghi is <a href="http://www.bloomberg.com/news/articles/2016-02-08/jefferies-strategist-the-ecb-and-the-boj-need-to-go-way-bigger-for-their-easing-to-work">going to need a much bigger bazooka</a>. </p><p>Here's an idea about <a href="http://www.businessinsider.com/new-theory-suggests-reason-cam-newton-stormed-out-press-conference-super-bowl-harris-2016-2">why Cam Newton was so upset</a> last night. </p><p>The Clinton campaign <a href="http://www.politico.com/story/2016/02/hillary-clinton-staff-shakeup-218955">might get</a> a staff shake-up after Tuesday's New Hampshire primary. </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/cam-newton-carolina-panthers-press-conference-nfl-denver-broncos-super-bowl-2016-2"> Here's the question that prompted Cam Newton to storm out of his postgame press conference</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="VoZG5yMDE6VHP_GWa6so3qlVcSAMa9_y" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

TECH STOCKS GET SLAMMED: Here's what you need to know

<p><em>This story was originally sent to thousands of professionals just like you in this morning's IoT WEEKENDER newsletter.  Don't be left in the dark while your competition gets ahead each morning. <strong><a href="http://www.businessinsider.com/intelligence/insider-newsletter?&amp;utm_source=House&amp;utm_term=CtgrPr_IOTI-weekender-2015-6-20&amp;utm_campaign=CtgrPr_nlsa">Learn more about our 7-day FREE trial now </a><a href="http://www.businessinsider.com/intelligence/insider-newsletter?&amp;utm_source=House&amp;utm_term=CtgrPr_MI-mobile-news-2015-6-17&amp;utm_campaign=CtgrPr_nlsa">»</a></strong></em></p><p><strong><div class="KonaFilter image-container display-table float_right"><div><div class="image"></div></div></div>FITBIT'S IPO A BIG SUCCESS:</strong> On Wednesday night FitBit announced its official IPO price of $20 per share. The IPO raised $732 million for the wearables maker, valuing FitBit at $4.1 billion.<strong> </strong>The stock then opened Thursday morning at $30.40 per share, raising that valuation to $6.3 billion. The stock closed Thursday trading at $29.68 per share, a 48% increase from its IPO price.</p><p>The company's initial IPO terms said shares would be priced between $14-$16 per share, but those terms were updated earlier this week, raising the price to between $17-$19 per share. The updated terms also increased the number of shares it would offer from 29.9 million to 34.5 million in response to high demand from investors.</p><p>FitBit is the clear leader in the global wearables market right now, according to a recent <a href="http://www.idc.com/getdoc.jsp?containerId=prUS25658315&amp;utm_source=Triggermail&amp;utm_medium=email&amp;utm_term=BII%20List%20Mobile%20ALL&amp;utm_campaign=Post%20Blast%20%28research%29%3A%20The%20wearables%20market%20before%20Apple%20Watch%20%E2%80%94%20Apple%27s%20connected%20home%20makes%20its%20way%20to%20consumers%20%E2%80%94%20Magic%20Leap%20to%20become%20less%20mysterious">report</a> from the IDC. FitBit shipped 3.9 million devices in Q1 2015, more than 1 million more shipments than any of its competitors. The company sold more than 10 million devices last year, more than doubling the number it sold in 2013.</p><p><strong>FitBit has also been hit with two lawsuits in the last month from rival wearables maker Jawbone</strong>. Jawbone claims that FitBit systematically sole confidential information by hiring away Jawbone's employees. The increased IPO terms indicate that investors aren't too worried about the lawsuits.</p><p><strong><em>Finding this article interesting? Thousands of professionals just like you had it in their inbox first. Stay ahead of the curve and gain a comprehensive understanding of the latest news &amp; trends, start your day with the IoT</em></strong><strong><em> INSIDER. <a href="http://www.businessinsider.com/intelligence/insider-newsletter?&amp;utm_source=House&amp;utm_term=CtgrPr_IOTI-weekender-2015-6-20&amp;utm_campaign=CtgrPr_nlsa"> Get 7-days FREE » </a></em></strong></p><p><strong><div class="KonaFilter image-container display-table zoomin"><div><div class="image"><a href="https://static-ssl.businessinsider.com/image/5429660f6bb3f7b92836fb01-960/connectedhomedevicecategories-1.png"></a></div></div></div>NEST CAMERA LAUNCHES: </strong>Nest announced the launch of the Nest Cam, the first new product the smart thermostat company has launched since it was acquired by Google. The Nest Cam is the result of another Google acquisition: its $555 million purchase last year of Dropcam. The new camera is an updated version of Dropcam's, with improved resolution and night vision, and can be placed around the home for security monitoring. The camera will start shipping next week and will be priced at $199.</p><p>Along with the new camera, Nest also announced a partnership with home insurers Liberty Mutual and American Family to give customers who own Nest products up to a 5% discount on their premiums. Nest also announced a new app that will allow Nest products to work together. For instance, if the Nest smoke alarm senses a problem, it can tell the Nest thermostat to turn off the heating system in case of carbon monoxide. Nest will be pushing software updates to its smart thermostats and smoke alarms for that integration. Nest's smart thermostat and security camera give it a foothold in the two smart home product categories we think will grow the fastest: smart home energy and smart home security.</p><p><strong style="line-height: 1.5em;">SMART METERS HELP CALIFORNIA ENFORCE WATER USE RESTRICTIONS DURING DROUGHT: </strong>Some California utilities are starting to roll out smart water meters to help enforce restrictions the state enacted in response to its extreme drought, WIRED <a href="http://www.wired.com/2015/06/smart-water-meters-let-cities-spot-drought-defiers/">reported</a> yesterday. The new restrictions limit the days and times that businesses and residents can water their lawns. Traditional water meters can't tell what time a business or home is using water for such purposes; they just tally up how much water is used each month. So local water utilities have been installing smart water meters at homes and businesses that have been reported for violating the restrictions. The smart meters can report water usage in near real time, allowing utilities to catch violators and fine them.</p><p>The article demonstrates some of the barriers that utility companies face in deploying smart water meters. Utilities usually deploy smart electricity meters to save money from sending employees to perform house calls, but the cost of smart water meters is sometimes too high to justify that savings, according to the report.</p><p>Utility companies also don't have the IT infrastructure (such as data centers or networking infrastructure) in place to support tens or hundreds of thousands of connected smart meters.</p><p>This is forcing smart meter providers to build those resources themselves, according to the WIRED article. For instance, smart meter provider T2, which is piloting smart water meters with authorities in Long Beach, California, uses Verizon's cellular network to circumvent the need for network infrastructure to connect meters. Their meters are also battery-powered, saving the utility the cost of providing electricity for them. And the Long Beach water department didn't need to purchase servers to support the smart meters since T2's solution is hosted in Microsoft's Azure Cloud.</p><p>BI Intelligence estimates that global smart meter installations will grow from 59 million this year to 134 million in 2020, but we expect smart electricity meters to make up the bulk of those installations. However, extreme weather conditions like California is experiencing, and continued water crises in developing countries like India, could spur municipalities to install smart water meters in greater numbers.</p><p><strong style="line-height: 1.5em;"><strong><div class="KonaFilter image-container display-table zoomin"><div><div class="image"><a href="https://static-ssl.businessinsider.com/image/5524320b6bb3f7652cfc827d-960/bii%20estimated%20number%20of%20smart%20meter%20installations%202015%204%207.png"></a></div></div></div></strong>GOGORO SETS PRICING AND LAUNCH DATE FOR ITS SMART ELECTRIC SCOOTERS: </strong>Connected cars are getting a great deal of attention right now, as they offer the chance to transform transportation in Western countries where cars and trucks dominate road traffic. In Asia's dense mega-cities though, it's gas-powered scooters, not cars, that rule the road. Taiwan-based Gogoro is trying to connect those vehicles while also driving down energy consumption in those heavily polluted megalopolises with its electric Smartscooter. Gogoro <a href="http://www.theverge.com/2015/6/17/8795087/gogoro-pricing-preorder-taipei">announced</a> yesterday that it would start taking orders on for its Smartscooters - priced at $4,100 - in Taiwan later this month.</p><p>Gogoro's scooters include 30 sensors that send diagnostic information to owners' smartphones via Gogoro's app and are powered by two 20-pound batteries. When the batteries run low, they can be swapped out at Gogoro's smart recharging stations for fully charged batteries. Gogoro plans to place networks of its charging stations throughout cities in Asia. It already has 32 in Taipei, Taiwan's capital city, as part of the pilot it's running there. It plans to increase that number to 150 by the end of the year. The Smartscooter can travel 62 miles at 60mph on a pair of fully charged batteries.</p><p>Gogoro will need the infrastructure of battery-swap stations in place to expand to new cities. The Smartscooter is also more expensive than gas-powered alternatives, but the company says that over the first two years of ownership the electric Smartscooter costs less than some gas-powered models. Replacing the millions of gas-powered scooters on the streets of Asia's biggest cities with electric ones would help alleviate the air pollution problems in many of those cities.</p><p><strong>TESLA PARTNERS WITH LEADING BATTERY TECH RESEARCHER: </strong>Tesla might have drawn closer to its goal of replacing carbon fossil fuels with lithium ion battery cells this week. The company <a href="http://fortune.com/2015/06/17/meet-teslas-new-weapon-a-battery-scientist/">signed</a> an exclusive agreement with Jeff Dahn, a professor at Dalhousie University in Nova Scotia and one of the world's top lithium ion technology researchers, to apply his research to Tesla's batteries. In exchange Tesla will provide financial support for Dahn and his team of 20 researchers. The partnership will start in June 2016, after Dahn wraps up another project he is working on.</p><p>Dahn will aim to improve Tesla's lithium ion batteries in multiple ways, such as lowering costs to make Tesla products more affordable for consumers, increasing the amount of energy each battery can store, and increasing the lifetime of lithium ion battery cells.</p><p>Those last two objectives are particularly problematic. The easiest way to increase the amount of energy that can be stored in a lithium ion battery is to charge it to a higher voltage. But that decreases the battery's lifetime. If Dahn can find a way to increase the energy a battery can store without decreasing its lifetime, it would make Tesla's battery storage solutions more cost-effective for large-scale applications in energy grids and enterprises. </p><p><strong><div class="KonaFilter image-container display-table zoomin"><div><div class="image"><a href="https://static-ssl.businessinsider.com/image/545cea1c6bb3f7cd575e46f0-960/iot%20enterprise%20investments%20by%20industry.png"></a></div></div></div>EXAMINING CLAIMS OF AN IoT BUBBLE: </strong>Apple cofounder Steve Wozniak made headlines recently warning investors that he thinks the Internet of Things market is in a bubble phase. The number of startups and solutions in the IoT market is growing fast, but it will take time for consumers to adapt to and trust some IoT technologies, such as self-driving cars, Wozniak explained. However, his claims of a full-blown IoT market bubble are overblown, according to a recent <a href="http://www.usatoday.com/story/money/business/2015/06/12/internet-of-things-bubble-steve-wozniak-the-motley-fool/71120522/">analysis</a> from The Motley Fool.</p><p>The price-to-sales ratios of three IoT companies - Sierra Wireless, Skyworks Solutions, and Invensense - are nowhere near as high as the ratios of internet companies before the dotcom bubble of the late 90's and early 2000's, the article pointed out. Price-to-sales ratios compare a company's stock price to its actual revenues, giving investors a sense of how the market views a company compared to its actual performance. The price-to-sales ratios of the three IoT companies over the last five years were a fraction of the ratios that companies like Cisco and Microsoft had during the dotcom bubble, according to the article. </p><p>The article also pointed out the error in talking about an IoT market bubble. The IoT market covers a vast array of industries and segments including healthcare, manufacturing, and defense, as well as consumer home appliances, cars, and wearables. Some of those markets will develop faster than others. So there may be IoT market bubbles in certain industries, but other industries will likely pick up the slack for IoT adoption.</p><p>Don't miss another day of breaking developments! Stay ahead of the curve and gain insight into the latest news &amp; trends. Join thousands of other professionals who start the day with IoT INSIDER. <strong><a href="http://www.businessinsider.com/intelligence/insider-newsletter?&amp;utm_source=House&amp;utm_term=CtgrPr_IOTI-weekender-2015-6-20&amp;utm_campaign=CtgrPr_nlsa">Try it FREE for 7 days now »</a> </strong></p>

Here's what happened in Internet of Things this week

<p><em>Hello, everyone! Welcome to the new edition of Insider Today. Please </em><a href="http://insider.com/insidertoday"><em>sign up here</em></a><em>. </em><em>To view this newsletter on our site, <a href="https://www.businessinsider.com/why-are-the-george-floyd-protests-so-much-more-intense-2020-6">click here</a>.</em></p><h2><strong>BLODGET &amp; PLOTZ</strong></h2><p><strong></strong></p><p><strong>Why now? Why everywhere? And why so much more intense?</strong></p><p>The peaceful protests over <keyword id="9295731" type="UNKNOWN" weightage="60" keywordseo="george-floyd">George Floyd</keyword>'s death have spread with amazing speed, as has the violence. <keyword id="11098" type="ORGANIZATION" weightage="60" keywordseo="police">Police</keyword> have escalated tense encounters by meeting mild resistance with rubber bullets, pepper spray, and tear gas. Chaos agents among the protesters are setting fires, breaking windows, spraying graffiti, and looting.</p><p>Why are these protests so much more intense than protests after earlier episodes of police brutality?</p><p>Here are nine reasons, starting with the most important.</p><ol><li>Floyd's murder was a tragic horror. The fact that it was captured on video compelled all Americans to face that horror directly. Black Americans saw themselves or their loved ones in that video. In that and other videos, many white Americans finally saw the racism, brutality, unfairness, and fear black Americans have had to live with forever.</li><li>The pandemic has hit urban black America harder than anywhere else. Death rates and job losses are highest there, so it's no surprise that sorrow, desperation, and economic anxiety are surging. As Princeton professor Keeanga-Yamahtta Taylor <a href="https://www.nytimes.com/2020/05/29/opinion/george-floyd-protests-minneapolis.html">told The New York Times</a>: "Where people are broke, and there doesn't appear to be any assistance, there's no leadership, there's no clarity about what is going to happen, this creates the conditions for anger, rage, desperation and hopelessness, which can be a very volatile combination."</li><li>The Trump administration has encouraged militarized policing, and <a href="https://nymag.com/intelligencer/2020/05/trumps-george-floyd-obama-protest-police-violence-kneeling.html">rolled back Obama-era reforms</a> aimed at deescalating conflict between cops and citizens. For example, Trump's DOJ reversed policies restricting sales of military equipment to police departments, even though research shows <a href="https://journals.sagepub.com/doi/full/10.1177/2053168017712885">militarized cops are more violent cops</a>. The phalanxes of body-armored, helmeted, "RoboCop"-ish, heavily armed police heighten tensions on the street and lower the threshold for violence.</li><li>A climate of political extremism emboldens people who want to use mayhem to their own ends. It's clear that most protesters are peaceful, but also that there's a minority of people who want to cause disorder. That chaos-seeking minority is significant enough and aggressive enough that the peaceful protesters can't restrain them.</li><li>The mask-wearing required by the pandemic actually makes things worse. It gives impunity to the mischief makers. When everyone is wearing a mask, you can easily blend into the anonymous crowd before and after vandalizing or looting.</li><li>Cops and protesters are rarely best friends, but the political divide between these cops and these protesters is stark. Law enforcement has become increasingly conservative in recent years, and pro Trump. Many police officers are antagonistic to the protesters and the media covering the protests, and that intensifies conflict. (This also may be one reason there are <a href="https://www.buzzfeednews.com/article/lamvo/journalists-protests-arrested-injured">so many reports</a> of police knowingly firing on or assaulting reporters covering the protests. <a href="https://slate.com/news-and-politics/2020/05/police-response-george-floyd-minneapolis-shutdowns.html">By contrast, none of the anti-lockdown protests degenerated into violence,</a> in part because police were so respectful toward the protesters, and willing to engage in dialogue.)</li><li>Relatedly, urban cops don't live in the communities they police. They don't know the protesters. They are not neighbors. <a href="https://fivethirtyeight.com/features/most-police-dont-live-in-the-cities-they-serve/">This stunning chart made by FiveThirtyEight back in 2014</a>, which resurfaced this weekend, shows how few cops — especially white cops — live in the cities where they work.</li><li>The internet and social media enable decentralized, often leaderless protests, which reduces the opportunity for productive dialogue between authorities and protesters. In most cities it is not obvious how a mayor or police chief could stop these protests even if they agreed with the goals of the protesters, because there's no particular person who speaks for the crowd.</li><li><a href="https://www.vox.com/2020/5/31/21275996/curfew-floyd-protest-riot-los-angeles">Curfews paradoxically probably <em>heighten </em>conflict.</a> The mischief makers are undeterred by curfews, and curfews increase the number of encounters police have with "law-breaking" citizens, which increases the number of opportunities for escalation and violence. <em>—DP</em></li></ol><p><br /><br /></p><p><strong>What can be done to reduce the kind of police violence that killed George Floyd? A lot.</strong></p><p><strong><div type="image" title="protest new york" height="750" width="1500" msid="76144601" hostid="261"></div></strong></p><p>Police violence isn't necessary and it isn't inevitable. Plenty of countries have none of it, and there are lots of practical ways to reduce it.</p><p>Here, for example, is a <a href="https://twitter.com/samswey/status/1180655701271732224">great twitter 2019 thread</a> from Samuel Sinyangwe, one of the founders of the anti-police-violence group <a href="https://www.joincampaignzero.org/">Campaign Zero</a>, about effective methods for cutting police violence.</p><p>Among the most useful measures, he says, are demilitarization, more restrictive state and local policies about use of force, union contracts that don't shield violent cops, and diverting calls about mentally ill people away from 911. (Not effective: body cams and implicit-bias training.)</p><p>Sinyangwe has <a href="https://twitter.com/samswey/status/1266855519425384450">another thread from this weekend</a> listing recent local and state legislation (some passed) to reduce police violence, including laws banning choke holds, requiring drug/alcohol testing for officers who shoot suspects, barring the hiring of officers previously fired for using excessive force, and a lot more. Former Democratic presidential candidate Julian Castro similarly has proposed a national database of decertified police officers, which would keep bad apples from moving around.</p><p>Libertarians also have plenty of compelling ideas for restraining police violence. Rep. Justin Amash announced last night that he's introducing a bill to <a href="https://twitter.com/justinamash/status/1267267244029083648">end "qualified immunity"</a> for police officers, a protection that essentially prevents them from ever being held liable in a lawsuit for anything they do on the job, even something heinous. <em>—DP</em></p><p><br /><br /></p><p><strong>We are anti-fascism</strong></p><p>The moment the protests began, some Americans — including President Trump — started blaming them on "Antifa."</p><p>There's no actual organization called "Antifa." But the term "Antifa" is used to describe some left-wing groups and individuals who believe they are justified in using violence to advance their causes and regard those who disagree as part of the problem. Antifa, in other words, is a collection of extreme left "militia"-style advocacy groups, similar to such groups on the extreme right.</p><p>We do not support "Antifa." We are against using violence to advance causes. We believe violence should always be a last resort.</p><p>But we are certainly anti-fascism.</p><p>And we would like to hear our president make clear that he, too, is anti-fascism. Because sometimes these days, it's hard to tell.</p><p>What is anti-fascism?</p><p>Well, it's being against authoritarianism, and the hyper-nationalist, domineering government behavior that often goes with it.</p><p>Also, because we would rather be <em>for</em> things than <em>against</em> things, here are some of the things that we are for:</p><p>We are for democracy.</p><p>We are for the rule of law.</p><p>We are for respect.</p><p>We are for dignity.</p><p>We are for civility.</p><p>We are for diversity.</p><p>We are for fairness.</p><p>We are for truth.</p><p>We are for humanity.</p><p>We are for the environment.</p><p>We are for science.</p><p>We are for tolerance.</p><p>We are for freedom.</p><p>We are for a better future.</p><p>We are for America as it aspires to be and can be.</p><p>That's anti-fascism. That's what we're for.</p><p><strong>Facebook employees speak out about Zuckerberg's decision to let Trump's posts stand ... </strong></p><p><strong><div type="image" title="Mark Zuckerberg" height="1221" width="2443" msid="76144604" hostid="261"></div></strong></p><p>Facebook's hands-off stance on political speech has often frustrated observers, including some who work for the company. Now, with Twitter having finally taken steps to rein in the president while Facebook CEO Mark Zuckerberg has reaffirmed his commitment not to do so, <a href="https://www.businessinsider.com/internal-strife-facebook-zuckerberg-trump-2020-6">some Facebook employees are speaking out</a>.</p><p>One of many Facebook employees who took their frustrations to Twitter put it this way:</p><p>"I'm a FB employee that completely disagrees with Mark's decision to do nothing about Trump's recent posts, which clearly incite violence. I'm not alone inside of FB. There isn't a neutral position on racism."</p><p>Zuckerberg is in a tough place here. He's trying to have his cake and eat it, too. He's trying to create a neutral platform in which anyone can share anything while also being a force for good in the world. And he is learning that it is sometimes impossible to be both at the same time.</p><p>The goals of "free speech," political neutrality, and civil discourse, after all, often collide with one another.</p><p>Facebook desperately wants to avoid being viewed as a "publisher," an organization that makes decisions about what is and isn't appropriate and OK as a core part of its mission and business. But as the ever-increasing scrutiny is making clear, from within and without, that's what Facebook is.</p><p>Facebook long ago began doing its duty as a publisher on the easier end of the spectrum — banning pornography, violence, weapons and drug sales, and other forms of speech.</p><p>Now it is going to have to make harder decisions. <em>—HB</em></p><h2><strong>OTHER <keyword id="6355005" type="UNKNOWN" weightage="60" keywordseo="news">NEWS</keyword></strong></h2><p><a href="https://www.reuters.com/article/us-health-coronavirus-italy-virus-idUSKBN2370OQ"><strong>Doctors in Italy report that the coronavirus is weakening</strong></a><strong>.</strong> File this under "let us hope." Viruses do mutate, sometimes into more deadly and less deadly forms. A couple of doctors in Italy believe the coronavirus has become less deadly than it was a few months ago.</p><h2><strong>BUSINESS &amp; <keyword id="34412" type="ORGANIZATION" weightage="60" keywordseo="economy">ECONOMY</keyword></strong></h2><p><strong>One strategist believes the ongoing stock rally is setting up a "classic bear-market trap."</strong></p><p>Many observers have been mystified by the market's behavior since mid-March. Despite a crippling blow to the economy, 40 million unemployment claims, the near shutdown of major industries, and increasing civil unrest, stocks have recovered almost all their losses.</p><p>Why?</p><p>The bulls believe the market is just looking forward from the current carnage to the recovery, which they believe will be stronger than many people think. They point to the massive emergency measures that the Federal Reserve and Congress have thrown at the crisis, which have helped cushion the blow and reduce the worst-case scenario risks. And they believe that, although things are terrible now, the news will get better from here.</p><p>One of Wall Street's top strategists, however, thinks this optimism is just delusion. David Rosenberg, of Rosenberg Research, says <a href="https://www.businessinsider.com/stock-market-crash-why-current-rally-is-trap-david-rosenberg-2020-5">investors are falling into a "classic bear market trap."</a></p><p>Most bear <keyword id="31671" type="CITY" weightage="60" keywordseo="markets">markets</keyword>, Rosenberg observes, go through distinct phases. There's the sharp, initial plunge, which scares the bejesus out of everyone, and triggers panic selling. Then there's a strong recovery in the face of this fear, which deludes people into thinking the worst is over and a new bull market has begun. And then there's a long, brutal decline that lasts for a year or more and takes the market far below the depths of the initial plunge.</p><p><div type="image" title="rosenberg bear markets" height="892" width="1282" msid="76144606" hostid="261"></div></p><p>Rosenberg believes we're in the second phase — a "bear-market rally" that is calming fears and deluding people into thinking that the storm is over before resuming a more painful decline.</p><p>Having worked as a professional analyst and journalist during two of the bear markets Rosenberg describes (2000 to 2002 and 2008 to 2009) — and having studied the "Great Crash of 1929" — I can confirm that these patterns are real. </p><p>By September 2000, for example, in the early months of the "dot-com bust," the Nasdaq had recovered most of the gut-wrenching losses it had suffered that spring, and most of the "smart money" (including, unfortunately, me) believed that the worst was over. But then stocks rolled over again and began a more sustained, devastating, and demoralizing decline. Two years later, the Nasdaq finally bottomed down more than 80% from its peak.</p><p>The same thing happened in 1929. By the spring of 1930, the market had recovered much of the ground it had lost on "Black Monday" and other dark days the prior fall, and some investors thought stocks were off to the races again. Then the crash resumed, and the economy headed into the Great Depression. Two years later, in 1932, the major index closed down more than 80% from the top.</p><p>As David Rosenberg says, we saw a similar pattern in 2008. And we could certainly see a similar pattern here.</p><p>I will also note, however, that moments of greatest fear and skepticism are often the best buying opportunities. Back in mid-March, for example, the market was plummeting hundreds of points a day, and it seemed like the world was ending. Since then, though, the economy and pandemic, despite being horrific, have not suffered the worst-case scenarios that some investors envisioned, and investors who bought in March have been rewarded. If the economy continues to recover, and we have some medical breakthroughs or good luck and do not experience a major "second wave" of the pandemic, the market could well climb the "wall of worry" back to new highs.</p><p>So, in other words, as always with the <keyword id="6357440" type="DEFINITION" weightage="60" keywordseo="Stock-Market">stock market</keyword>, there are smart investors and persuasive logic on both sides.</p><p>How should a normal person invest in the face of this uncertainty?</p><p>The answer is different for each of us and depends on our individual risk tolerance and time horizon. No one knows the future, so we should build our portfolio so that we will be and feel OK no matter what happens.</p><p>For most of us — including me — that means diversification. Enough "safe" investments (cash) that if stocks drop 50% to 80% over the next 18 months, I won't panic at the "loss of my retirement" and sell. Enough "growth" investments (stocks) that if the market continues to rise, I'll offset the inexorable bleed of inflation and earn an acceptable rate of return.<em> —HB</em></p><h2><strong>YOUR LETTERS</strong></h2><p><em>On our essay about the tragedies of Minneapolis ...</em></p><p>With respect, and as a white woman, I think you could have done a better job with this. I understand you tried to address the injustice that sparked the violence and very much appreciate that you called out the difference in treatment between white and black protesters, but I think you could have done a lot more to underscore the hurt, anger, and injustice that the black community is rightfully feeling. I think it is your duty, with what I assume is your mostly white audience, to address this more strongly. To me, it seems like you understand but are afraid to do more than dip your toe in that water.</p><p><em>—Nescett Wright</em></p><p>Such a tragedy ... but really, are you surprised? Look at the photo. We see a wall of white faces in dark glasses and uniforms. No diversity, no understanding of standing in another man's shoes.</p><p>I fear for your country.</p><p><em>—Colin McDonald</em></p><p><em>Insider Today's goal is to provide you with insight and analysis about the big stories of the day — "Insider in your inbox."</em></p><p><em>Please feel free to reply to this email and tell us what you like or don't like, and we'll evolve and improve as we go. And if you're enjoying the newsletter, please forward to your friends.</em></p><p><em>Please also let us know your thoughts on the topics we discuss. Please include your name and city/state/country. If we think other readers will enjoy your note, we'll publish it! </em><a href="mailto:henry@insider.com"><em>henry@insider.com</em></a><em> and </em><a href="mailto:dplotz@businessinsider.com"><em>dplotz@businessinsider.com</em></a><em> </em></p>Read the original article on <a href="https://www.businessinsider.com/why-are-the-george-floyd-protests-so-much-more-intense-2020-6">Business Insider</a>

Why are the protests so much more intense?

How Kimberly Guilfoyle, the 'human Venus flytrap,' has groomed boyfriend Don Jr. into a political powerhouse and turned herself into a conservative star

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Reuters/David W Cerny</span></p></div><p></p></div></div>Stocks made a u-turn in afternoon trading, rallying into positive territory after opening lower for a second straight day, as crude oil also reversed losses.</p><p>First, the scoreboard:</p><ul><li><span style="line-height: 1.5em;"><strong>Dow:</strong> </span>16,484.99, +53.21, (0.32%)</li><li><strong>S&amp;P 500:</strong> 1,929.80, +8.53, (0.44%)</li><li><strong>Nasdaq:</strong> 4,542.61, +39.02, (0.87%)</li><li><strong>WTI crude oil:</strong> $32.15, +$0.28 (0.9%)</li></ul><p>And now, the top stories on Wednesday:</p><h2>Something is wrong</h2><p>A gigantic sector of the economy flashed red today.</p><p>Markit's <a href="http://www.businessinsider.com/markit-flash-services-pmi-february-2016-2">flash services </a><span><a href="http://www.businessinsider.com/markit-flash-services-pmi-february-2016-2">purchasing manager's index</a>, a preliminary reading on the sector for February, fell into contraction. At 49.8, it was the first time since the recession that service-sector activity contracted, except for during the government shutdown in October 2013.</span></p><p><span> The services sector contributes to about two-thirds of economic growth, and so we're now looking at "</span><strong>a significant risk of the US economy falling into contraction in the first quarter</strong>," according to Chris Williamson, chief economist at Markit.</p><p>Markit explained that bad weather (remember winter storm Jonas?) played a role. Also, business people got fewer orders for new work because their clients were growing less confident in the economic outlook. </p><p>The recent consensus has been that economic growth is chugging along fine, helped by consumer spending and a strong labor market. This was happening even as financial markets were in turmoil. And so the data today interrupts that narrative.</p><p>Now here come some caveats: This is a <em>flash</em> reading, and so we have to wait another week for the final reading, along with the ISM's non-manufacturing composite, that would give us a more robust picture of what's going on. Also, as RBC's Tom Porcelli highlighted in a note, the ISM non-manufacturing index is still in expansionary territory above 50. The reverse is true for the manufacturing series, but Markit's reading above 50 is not being used to counter ISM's index that's below 50. </p><p>Porcelli wrote (emphasis ours),</p><p style="padding-left: 60px;">F<span>olks, when it comes to digesting economic data we actually cannot have our cake and eat it too. That point aside, ask yourself what makes more sense given what we know from an unbiased perspective about the state of things in the US: that the service sector would slip below the critical 50 threshold before manufacturing, or vice versa? According to Markit, it's the former that makes most sense. </span></p><p style="padding-left: 60px;"><span>We'll say it again, <strong>if we see signs that growth is going to slow sharply in the US, we will gladly change our call--but the Markit PMI is surely not going to be that trigger for us</strong>.</span></p><h2>More housing data</h2><p><a href="http://www.businessinsider.com/new-home-sales-january-2016-2016-2">New home sales</a> fell more than expected in January, by 9.2% at an annual rate of 494,000. That was worse than expected, and a slowdown from the 8.2% drop at an annual rate of 544,000 in December. Much of the sales decline was in the west (32%).</p><p>Economists at Jefferies and Pantheon Macroeconomics noted that the regional data can be unreliable. </p><p>"The series on new home sales is often choppy, but through some of the noise in the data, it appears that home sales are continuing to trend higher over time off of historically low levels," wrote JP Morgan's Daniel Silver in a client note. "We maintain our view that the housing market will continue to recover."</p><p>And two earnings releases Tuesday - from <a href="http://www.businessinsider.com/us-housing-market-update-2016-2">Home Depot</a> and Toll Brothers - confirmed that the housing market is still healthy. </p><p>Lowe's provided a third big anecdote with its quarterly results today. The home-improvement giant reported better-than-expected sales, with same-store-sales growth of 5.2%. However, its net earnings fell year-over-year to $11 million from $530 million, and that was because of a $530 million impairment charge it suffered with the exit of its joint venture in Australia. </p><p>And for the current fiscal year, Lowe's expects that its sales will rise 6% to $62.62 billion, as it continues to ride the housing boom. </p><p><a href="http://www.businessinsider.com/existing-home-sales-january-2016-2">Existing home sales</a> for January unexpectedly climbed, according to data out yesterday. Home prices numbers are due Thursday.</p><h2>Chesapeake Energy is buckling</h2><p>As expected, <a href="http://www.businessinsider.com/chesapeake-earnings-and-outlook-q4-2016-2">Chesapeake Energy</a> has a smaller capital expenditure budget this year compared to last year, as it focuses on keeping a healthy balance sheet and maintaining liquidity.</p><p>In the earnings announcement Wednesday, the company said it had sold or agreed to sell $700 million in assets, which was higher than the amount it told investors in December. Chesapeake is aiming to divest from up to $1 billion of its assets to raise cash. </p><p><span>Earlier this month, </span><a href="http://www.businessinsider.com/chesapeake-share-price-february-8-2016-2">Chesapeake shares</a><span> plunged more than 50% following a Debtwire report that it had hired Kirkland &amp; Ellis to restructure $9.8 billion in debt. And on Wednesday, the stock was up by more than 21%, which must have been some relief for <a href="http://www.businessinsider.com/sp-may-cut-icahn-enterprises-to-junk-2016-2">Carl Icahn</a>, who holds 73 million shares. </span></p><h2><span>Forecasters are bad at forecasting<br /></span></h2><p><span></span><span>We just got the latest Economic <a href="https://www.whitehouse.gov/sites/default/files/docs/ERP_2016_Book_Complete%20JA.pdf">Report</a> of the President, and found two of the charts quite interesting. </span></p><p><span>As Andy Kiersz wrote on the first, <a href="http://www.businessinsider.com/unemployment-projections-have-been-wrong-2016-2">consensus forecasts on the unemployment rate</a> a few years out have tended to be much higher than the actual rate. </span></p><p><span>For instance, the consensus thought the unemployment rate would be above 5% until at least 2020. However, it only just fell to 5% in October.<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="White House" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/56cdad126e97c625048b93e1-960/screen shot 2016-02-24 at 7.52.53 am.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span><a href="https://www.whitehouse.gov/sites/default/files/docs/ERP_2016_Book_Complete%20JA.pdf">White House</a></span></p></div><p></p></div></div></span></p><p>And here's Exhibit B, which Myles Udland called the <a href="http://www.businessinsider.com/imf-global-economic-revisions-2016-2">most depressing chart</a> in the world:</p><p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="White House" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/56cd9ed22e5265bc008b924c-960/screen shot 2016-02-24 at 7.05.40 am.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>White House</span></p></div><p></p></div></div></p><p>It shows that the International Monetary Fund has consistently cut its global growth forecast, only for that forecast to prove too aggressive.</p><p>But what's sadder about this is how the IMF thought in 2011 that 2016 gross domestic product would grow by 5%. If only.</p><h2>Additionally:</h2><p><a href="http://www.businessinsider.com/annual-cost-of-juvenile-incarceration-versus-other-expenditures-2016-2">One year of juvenile jail costs three times more than four years of college</a>.</p><p><a href="http://www.businessinsider.com/eurasia-group-next-big-energy-story-2016-2">Forget OPEC - the next big energy story is the US election</a>.</p><p><a href="http://www.businessinsider.com/ubs-these-look-like-bubbles-right-now-2016-2">UBS thinks three major trades in the market right now look like bubbles</a>.</p><p><a href="http://www.businessinsider.com/older-americans-are-holding-more-debt-2016-2">Older Americans are holding more and more debt</a>.</p><p><a href="http://www.businessinsider.com/valeant-breaks-one-of-warren-buffets-rules-2016-2">Valeant broke one of Warren Buffett's most important investing rules</a>.</p><p><a href="http://www.businessinsider.com/mcdonalds-new-mcpick-2-is-now-5-dollars-2016-1">McDonald's McPick 2 no longer costs $2 and people are livid</a>.</p><p><a href="http://www.businessinsider.com/melania-trump-donald-morning-joe-interview-2016-2">Possible next first lady Melania Trump was on MSNBC's "Morning Joe". You have to see the Trumps' gold penthouse</a>.</p><p><a href="http://www.businessinsider.com/ivanka-trumps-shares-top-negotiating-rules-2016-2">Ivanka Trump shares six golden rules of negotiation</a>.</p><p><a href="http://www.businessinsider.com/letter-to-talia-jane-and-stefanie-williams-about-salaries-2016-2">Hardworking millennials are getting shafted by older people in the workplace</a>. Related: <a href="http://www.businessinsider.com/stefanie-williams-response-to-yelp-employee-talia-jane-2016-2">29-year-old millennial rips 25-year-old Yelp employee who got fired after complaining about her salary</a>.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/cam-newton-carolina-panthers-press-conference-nfl-denver-broncos-super-bowl-2016-2"> Here's the question that prompted Cam Newton to storm out of his postgame press conference</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="VoZG5yMDE6VHP_GWa6so3qlVcSAMa9_y" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

STOCKS COME ALL THE WAY BACK: Here's what you need to know

<p><div class="image-container float_right" style="width:480px"><div class="image"><p class="source">Screenshot</p><p class="caption">The <keyword id="1761269" type="UNKNOWN" weightage="60" keywordseo="Slixa">Slixa</keyword> homepage.</p></div></div><span style="line-height: 1.5em;">You're never more than a few clicks away from all kinds of adult entertainment online – pictures, erotic movies, whatever your heart desires.</span></p>
<p>Now a<a href="https://www.slixa.com"> site called Slixa</a> is trying to harness the power of social media for the world's oldest profession.</p>
<p>The site functions as a localized directory of escorts, erotic masseuses, dominatrixes, fetish workers, and the like. Each one maintains her own personalized profile page of autobiographical information, pictures, and rules on how customers should behave.</p>
<p>It's got a clean, modern design. It's incredibly intuitive to use. And it doesn't look anything like the cheap-looking text-only ads of Backpage.com, where many escorts migrated after CragsList banned hookers.</p>
<p style="padding-left: 30px;"><a href="http://www.businessinsider.com/slixa-escorts-walkthrough-2013-7"><strong>Click here for a (work-safe) tour of the site &gt;</strong></a></p>
<p>It works like this: You browse the site by city, reading the profiles of local escorts. When someone catches your eye, all you have to do is reach out to her. Entertainers' email addresses and phone numbers are publicly visible to anyone browsing the site, so this is a pretty straightforward proposition.</p>
<p>In a roundabout way, this is the Internet's picture menu of sex.</p>
<p>User registration is free, but not required. The only impetus to have an account would be to follow your favorite escorts' status updates, like a sexy Facebook newsfeed.</p>
<p>If you're a prospective customer looking to hire an <keyword id="6772715" type="PERSON" weightage="60" keywordseo="escort">escort</keyword>, you pay nothing to use the site. You have unlimited access to entertainer profiles and their contact information. <span>Escorts obviously make money from their clients while Slixa gets its share by </span><span>charging the escorts for their presences on the site. All standard pages are free right now, but entertainers can buy ad upgrades for a small fee to get increased publicity throughout the site.</span></p>
<p><span>Escorts use "credits" to buy a page (also called an ad) on Slixa, with each credit costing $1. To get your ad some exposure on a given city's page, Slixa charges 30 credits per month. To get it listed on the main homepage for some serious site-wide exposure, it's 375 credits for a 14-day period.</span></p>
<p><span>Spokesperson Lee Ann Jennings told us that </span><span style="line-height: 1.5em;">"Slixa has signed up more than 3,000 entertainers in seven months with no signs of slowing down. Escorts and other adult entertainers continue to join at a rapid rate, which of course we're very happy about. The really significant thing is that we're more interested in quality over quantity."</span></p>
<p><span style="line-height: 1.5em;">The site is completely bootstrapped, run without any venture funding – "Just the way we like it," said Jennings.</span></p>
<p><span style="line-height: 1.5em;">And how much use does the site get? Jennings revealed that the company has "</span>a strict privacy standard we adhere to, so we don't share any of our traffic stats with third parties. As for what percentage are hiring from the site, we don't track that information, as those discussions take place off-site, between the consumers and the entertainers for privacy reasons."</p>
<p>If you're into the idea of Slixa as long as your privacy is protected, this appears to be a non-issue.</p>
<p><span>In interviews, the only feedback we got from escorts using the site that even came close to constituting a "complaint" is that Slixa is still slightly under the radar and hasn't hit critical mass yet. One entertainer in New York City who requested to remain anonymous said that she would like to do much more business over the site in the future, but acknowledges that "it takes time to build a new brand. So, I believe in the site very deeply. I know it has a great future ahead of it, as it's specifically addressed issues that are a problem for other sites."</span></p>
<p><span>And what problems do these other sites have?</span></p>
<p><span>They "are either so poorly designed or have such low-functioning capacity that entertainers get lost in the shuffle (and if they don't want to be, they have to pay hundreds to thousands of dollars just to get any attention to their ads). Slixa does a fantastic job of creating a space where entertainers who invest in their business with high quality photos and ad copy have a chance at getting attention, without having to compete with cam sites or pornographic advertising," this escort said.</span></p>
<p>We had all kinds of legality questions. What's the difference between an escort and a prostitute, and how is Slixa able to operate in the clear?</p>
<p>We reached out to Adrianna Carter, an escort using the site to publicize her wares, who told us that <span>"escorts are high-end companions. Prostitutes sell sex for money." This appears to come down to the subtle difference between selling your time and selling your body.</span></p>
<p><span>We also spoke to Lisa Love, an escort operating out of Dallas, Texas, who explained it the same way: "</span><span>Well, an escort has companionship for sale. A prostitute has sex for sale. </span><span>I personally like to be described as a 'provider' because I provide the combined services of a therapist, girlfriend, best friend, and ego-booster, you could say. But as a provider, I sell my time. Now, how we choose to spend our time – that's all up to the client."</span></p>
<p><span>However, if you're going to use the site, be smart. <a href="http://www.schnipperlaw.com/">Atlanta lawyer David Schnipper</a> told us that ads for adult companionship will dance around the specific details of what to expect, instead using keywords like "massage," "time," or "companionship" to stay in the clear. But law enforcement obviously knows what's happening. They're just far less likely to care until someone complains or gets injured.<br /></span></p>
<p>We were obviously curious about the financials here, and Slixa pages readily tell you the rates you can expect to pay. As the site caters to a clientele that is often of some means, encounters can get expensive quickly. Each escort sets her own price, but as an example, here's how much one New York City escort charges:</p>
<ul>
<li><span>Two hours "get to know you" – $1,800</span></li>
<li><span>Five-hour dinner engagement – $6,000</span></li>
<li><span>Overnight bliss – $10,000</span></li>
</ul>
<p>We interviewed one such high-end escort (her name is being withheld at her request), who said that really enterprising and hardworking women can make as much as $400,000 a year, and six figures a year is common income for escorts in general.</p>
<h2 style="padding-left: 30px;"><a href="http://www.businessinsider.com/slixa-escorts-walkthrough-2013-7">Click here to take a (work-safe) tour of Slixa &gt;</a></h2>

This Startup Has Created A Facebook For Escorts

<p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div>At its Worldwide Developer Conference next week, Apple is going to share a success story that a lot of people don't know about. </p><p>Almost exactly one year ago, Apple released Swift, a new programming language promised to make it easier to build iPhone and Mac apps than ever before. <a href="http://www.businessinsider.com/swift-apple-programming-language-2014-6">Developers cheered</a> from the stands.</p><p>The vision behind Swift is right in the name. Apple promises Swift is faster to write, and results in faster applications. </p><p>That vision resonated: <a href="http://www.topcoder.com">Topcoder</a>, a site where developers go online to complete challenges for cash, says it has 3,700 registered developers interested in Swift, and hopes to build a 20,000-strong community by the end of the year, a spokesperson says.</p><p>And Swift frequently tops developer surveys as the language developers are the most interested in by <a href="http://stackoverflow.com/research/developer-survey-2015#tech-super">online coder hangouts like Stack Exchange</a>. Last November, <a href="http://www.businessinsider.com/man-made-money-teaching-online-apple-course-2014-11">a man made $66,000 in a month just by teaching other developers how to use Swift</a>, so strong is the interest.</p><p><span style="line-height: 1.5em;">But Apple isn't the first big tech company to release its own programming language - not by a long shot.</span></p><p><span data-wr_replaced="true">Back in 1991, Microsoft released Visual Basic as a way to streamline the development of Basic, one of the earliest popular programming languages with a graphical user interface (GUI).</span></p><p><span data-wr_replaced="true">More recently, circa 2009, Google released <a href="http://www.golang.org">Go</a>, its own programming language.</span></p><p><span style="line-height: 1.5em;">Programming languages are a matter of religion for so many developers. For Apple, Google, and even Microsoft way back when to release a new programming language means an uphill battle against the habits and routines of developers, who are set in their ways. </span></p><p><span style="line-height: 1.5em;">So there must be a carefully considered business case for this, right? Apple and Google must make money from this, right?</span></p><p><span style="line-height: 1.5em;">Except that they don't. Not really.</span></p><h2><span style="line-height: 1.5em;">The tower of babel</span></h2><p><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div></p><p><span>The two languages have a lot in common. Both Google's Go and Apple's Swift were designed to fix the problems that developers were having with older programming languages. </span></p><p><span data-wr_replaced="true">Swift is enough like <a href="http://en.wikipedia.org/wiki/Objective-C">Objective-C</a>, the programming language that dominates iOS coding, that developers picked it up quickly - in fact, it's similar enough that Objective-C and Swift code can be used side-by-side in the same app.</span></p><p>But Objective-C is over 30 years old at this point, and Swift is an effort to modernize it to make apps easier to write and run faster.</p><p>Similarly, Go was designed to make it easier to build complex systems. The old workhorses of the networked software programming industry, C++ and Python, just couldn't keep up with the demands that Google was placing on it.</p><p>"Go was born out of frustration with existing languages and environments for systems programming," says the official Go FAQ.</p><p>Hence, Go was born. It's made to be easier for coders to pick up, but still fixing a lot of the speed and performance problems of its forebears in the era of the gigantic data centers that we call "the cloud." As an open source project, developers all over the world are contributing to Go and making it better.</p><p><span>One fringe benefit for Google and Apple is that making your own programming language makes recruitment easier - for instance, since it builds a lot of its own server applications in Go, Google is more likely to hire a developer who's already proficient in the language since she would need less training. </span></p><p><span>Plus, any cool problems that developers in the wild solve with languages like Swift or Go, Apple and Google can adopt for their own businesses.</span></p><p><span>But for the most part, these languages are released into the world for the sole purpose of helping developers build better software. </span></p><h2><span data-wr_replaced="true">Swift grows swiftly</span></h2><p><span><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div></span></p><p>"The promise of [Swift] is, of course, apps will become more stable," says Jonathan Karon, Senior Software Engineering Manager at <a href="http://www.newrelic.com">New Relic</a>, which makes tools to help devlelopers monitor and debug their software.</p><p>More stable software means a better app experience, which makes Apple developers look good, and the iPhone look good by comparison. </p><p><span>Swift has had some early success, but it still needs some work, given that it is only a year old - its horsepower requirements mean that it's hard to write Swift code on a lower-end Macbook, it's still missing a lot of features, and there are ongoing debates in the developer community on whether or not Swift is actually faster than Objective-C.</span></p><p><span>But developers are bullish on Swift's future.</span></p><p><span>On the <keyword id="6356323" type="UNKNOWN" weightage="100" keywordseo="Enterprise">enterprise</keyword> side, Kuron says that he's finding that an increasing number of New Relic customers are keeping their existing back-end software in place, but that they're using Swift to build the apps that people actually use on their smartphones. </span></p><p>For consumer apps, language-learning app Duolingo is an early adopter of Swift, <a href="http://making.duolingo.com/real-world-swift">using it to build its Test Center app</a>. So is Lyft, which builds pieces of its ride-hailing car app on Swift. Streaming service Meerkat is a big fan of Swift, too.</p><p>"<span data-wr_replaced="true">We love Swift," Meerkat CEO Ben Rubin <a href="http://www.businessinsider.com/wwdc-what-developers-want-to-see-2015-6">told Business Insider recently</a>. "And we realize that since it's still a young technology there are gaps left to be filled, so we are looking forward to seeing improvements on the development experience."</span></p><p>Some Internet commenters have wondered aloud if Swift exists because Apple is just trying to build a programming language for iPhones and iPads that makes it harder to bring apps to Android, which might well be so.</p><p>But that's probably only part of the reason. Despite its carefully manicured public image, Apple engineers are just as nerdy and excited about solving problems as the next Silicon Valley engineer, and the company's developers likely jumped at the chance to release what it sees as a better solution unto the world.</p><p>If you're comfortable using Objective-C, Apple isn't stopping you. It just offers up Swift as an option.</p><p>"They treat Objective-C and Swift as equal languages in the documentation," says Sergio Prado, CEO of <a href="bodbot.com">BodBot</a>, a fitness app for iPhone and Apple Watch. "They're never forward about using Swift." </p><p>That said, Prado says that none of BodBot is built on Swift currently since it's just not something he's experienced with. But he says he's watching the language's development with interest. </p><p><span>Apple is expected to announce some of those hoped-for updates to Swift at Monday's WWDC keynote. </span></p><h2><span style="line-height: 1.5em;">Go to go</span></h2><p><span style="line-height: 1.5em;"><div class="KonaFilter image-container float_right"><div class="image on-image"></div><p></p></div><span>Go hasn't seen the explosive growth of Swift - not least because it targets more complex, so-called "system level" programming. </span></span></p><p><span style="line-height: 1.5em;"><span>The Go project has </span><a href="https://talks.golang.org/2012/splash.article">described itself </a><span>as "designed by Google to help solve Google's problems, and Google has big problems." You can use Go for a mobile app if you </span><em>really </em><span>want, but it's not what the language is best at.</span></span></p><p><span style="line-height: 1.5em;">Red-hot container startup <a href="http://www.docker.com">Docker</a> uses Go for some of its internal projects, as does growing cloud hosting service <a href="http://www.digitalocean.com">DigitalOcean</a>. If Swift is for making iPhone apps, Go is for the servers that hold that app's data. </span></p><p><span>"From our point of view, the language is easy to pick up and performant in production, so we will continue to explore the possibilities," says DigitalOcean software engineer Brian Liles. </span></p><p><span data-wr_replaced="true"><span>But in general, it hasn't taken off yet. </span></span></p><p><span data-wr_replaced="true"><span>"<span>We're not seeing a lot of Go usage from our enterprise customers yet, outside of some early experimentation in their labs," says <span>Dan Turkenkopf, the <span>Senior Director of Strategic Research of Apprenda, a platform that helps businesses build applications in the cloud. </span></span></span></span></span></p><p><span data-wr_replaced="true"><span><span><span><span>A major reason for that, says New Relic's <span>Karon, is that Google has a lot of programming intiatives in play. Google has Google Dart, another, far less popular programming language. </span></span></span></span></span></span><span style="line-height: 1.5em;">Google also has experimental new software compilers for Android apps in the works, code-named "Jack and Jill," that may or may not change the way developers have to build their apps.</span></p><p><span style="line-height: 1.5em;"> In other words, Google has a lot of balls in the air, and developers find their attentions drawn in different ways.</span></p><p>"I don't think they have a singular vision for the future," Kuron says.</p><h2>You can't fix stupid</h2><p>The final word here is that Google and Apple are both pushing programming languages because new advances in technology are being underserved by existing languages and techniques. It's a way to advance their own agendas, even if it's to get more people interested in what Google and Apple are doing. </p><p>But as New Relic's Kuron points out, faster, less buggy code doesn't automatically make your app worth using. Languages like Swift and Go aren't silver bullets that make an app useful or fun to use. You need good design and good features, too.</p><p>"Code is not really the part that gates performance on mobile," Kuron says.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/police-officer-singing-shake-it-off-2015-1">Watch That Dash Cam Video Tribute Of A Police Officer Singing Taylor Swift's 'Shake It Off'</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="hxdWV1cjp5WR4jP1eSYyjX63zj21K-_J" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Why Google and Apple made their own programming languages

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="http://pictures.reuters.com/Package/2C0BF1OW4OW89#/SearchResult&amp;ALID=2C0BF1OW4OW89&amp;VBID=2C0BX4NWMSXD&amp;POPUPPN=15&amp;POPUPIID=2C0BF1OWF4JU0">Reuters/Gonzalo Fuentes</a></span></p></div><p></p></div></div>Stocks keep rallying. </p><p>On Monday US stocks were higher across the board, continuing last week's rally that was the year's best. Crude oil prices also rallied on Monday with West Texas Intermediate crude rising 5%. </p><p>First, the scoreboard:</p><ul><li>Dow: 16,620.7, +228.7, (+1.4%)</li><li>S&amp;P 500: 1,945.5, +27.7, (+1.5%)</li><li>Nasdaq: 4,570.6, +66.2, (+1.5%)</li><li>WTI crude oil: $33.35, +5%</li></ul><h2><span style="line-height: 22.5px;">Markets Can Be Scary</span></h2><p><span style="line-height: 22.5px;">Last week things seemed to be turning around. Monday's rally affirmed the bulls.</span></p><p><span style="line-height: 22.5px;">But because sentiment lags price both on the way down and way up, <a href="http://www.businessinsider.com/englander-global-economy-is-black-hole-2016-2">Steven Englander at Citi found</a> that almost every client he talked to last week when he hopped a flight to Asia thought the world economy was a "black hole."</span></p><p>Englander writes:</p><p style="padding-left: 60px;"><strong>The prevailing view is that the global economy is like a shopping mall on the rocks.</strong> One anchor store gave unlimited credit to suppliers who overproduced on a massive scale. The second anchor gave free credit to customers who don't want to buy anymore. The interior tenants are stressed by ineffective management, a product mix that no longer appeals, pilfering and dismay that the consultants they hired introduced failed strategies.</p><p style="padding-left: 60px;">I don't agree with this view, at least with respect to the US and the divergence trade, but <strong>I was clearly in a small minority in not seeing the global economy as a black hole.</strong></p><p>And this is scary because both decrepit malls <em>and</em> black holes are not reassuring images for investors hoping to find some solace during what has been a very stressful year. </p><p>For his part, Englander thinks these concerns are somewhat overblown and is more sanguine about the future growth trajectory of the global economy than the investors he met with. But this is what's out there, still. </p><p>Meanwhile here at Business Insider, <a href="http://www.businessinsider.com/risk-of-a-stock-market-crash-2016-2">Henry Blodget was out over the weekend</a> with his latest warning that stocks could crash. With an assist from John Hussman, Blodget argued:</p><p style="padding-left: 60px;">Hussman's key observation about that chart - and the charts of many other market crashes in history, the most recent two of which he has correctly called in advance (2000 and 2007) - is that market crashes generally follow the same pattern.</p><p style="padding-left: 60px;">First, in a market in which stocks are highly overvalued (as they are today) and in which investors are increasingly risk-averse (as they are today - see the spreads on interest rates between safe and risky bonds), crashes are much more likely than they are in any other market environment.</p><p style="padding-left: 60px;">Second, crashes do not just happen suddenly - for years everything's great and then one day the market just falls out of the sky. Rather, crashes develop over many months. And the "crash" itself - the period of massive, near-vertical market losses - generally starts <span>after the market is already down about 15%.</span></p><p style="padding-left: 60px;">That's the insight to note in the chart above.</p><p>And here's that chart, below this time:</p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span><a href="http://www.hussmanfunds.com/wmc/wmc160215.htm">John Hussman, Hussman Funds</a></span></p></div><p></p></div></div></p><p>Andy Kiersz <a href="http://www.businessinsider.com/long-term-stock-price-returns-2016-2">notes that for long-term investors</a>, there really is only one thing to keep in mind: stocks go up. </p><p>This chart from Kiersz - with an assist from Robert Shiller - shows the returns if you bought and held stocks for any month over the last 140 or so years.</p><p>Some months served as better buying opportunities than others, but the best thing to do was buy and hold. Definitely hold, at least.</p><p>Of course, this trend might turn out to be a fluke and stocks might be a lousy investment going forward. But as is the case in all investment research, though past performance may not reflect future results, all we've got is the past performance. </p><p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span><a href="http://www.econ.yale.edu/~shiller/data.htm">Business Insider/Andy Kiersz, data from Robert Shiller</a></span></p></div><p></p></div></div></p><h2>Recession Watch, 2016</h2><p>Ward McCarthy at Jefferies <a href="http://www.businessinsider.com/yield-curve-not-indicating-recession-2016-2">doesn't think the flattening of the yield curve</a> means we're heading for recession. </p><p>"Is the flattening trend in the yield curve signaling that the US economy is headed for a recession? The answer is no," McCarthy wrote in a note to clients Monday.</p><p>"The slope of the coupon curve, as measured by the spread between the 2-year and 30-year, has averaged 144 bps," McCarthy wrote. "By historical standards, consequently, the current slope of the yield curve is steep, not flat."</p><p>Steep! You never hear that! 2016 has been about one thing and one thing only: flattening yield curves and recession probabilities. Flattening - let alone inverted - <a href="http://www.businessinsider.com/yield-curve-great-at-predicting-recessions-2015-12">yield curves are bad</a>. But in a post-QE, NIRP-filled world it's worth thinking about how much we can glean from this curve, and if the traditional dynamics we've learned impact the bond market and the world economy are still in play. </p><p>Related: are online lenders telling us something bad about the economy?</p><p><a href="http://www.businessinsider.com/ft-alphaville-the-online-lending-market-and-the-us-economy-2016-2">Maybe</a>. </p><p>Rates at online lenders like Prosper and Lending Club have gone up, but so has the Fed's benchmark rate. Additionally, <a href="http://www.businessinsider.com/welcome-to-the-great-monetary-tightening-2016-2">overall financial conditions have tightened</a>.</p><p>But there was also an uptick in delinquencies from some of these lenders' borrowers in the second half of 2015. So, what to make of it? </p><p>Well, consumers not paying back their loans is not a good sign. But even if you're a creditworthy borrower on paper, needing to take out a loan from an online servicer that charges 14% or 15% (instead of, say, a bank) must indicate <em>some</em> kind of financial stress that a small hiccup in one's standing would upset, right? Maybe!</p><p>Certainly a car loan or a mortgage is going to be cheaper than an online lender loan. Credit card debt is still more expensive. </p><p>The thing is: there are lots of signs that the economy, particularly the financialized economy, has had a tough six months. This doesn't mean, however, that the whole thing is rolling over.</p><p>For now.</p><h2>The 'Big Short'</h2><p>Auto sales have been on fire and the idea that subprime auto lending would create<a href="http://www.businessinsider.com/next-big-short-doesnt-make-sense-2016-2"> the next "Big Short"</a> opportunity has been around for a while.</p><p>But there's a problem: you're betting against cars, not houses.</p><p>A <a href="http://www.bloomberg.com/news/articles/2016-02-11/some-hedge-funds-want-to-make-subprime-auto-loans-next-big-short">story earlier this month from Bloomberg News</a> said that some investors were looking to bundle auto loans and short them a la the famous trade executed by the heroes of Michael Lewis' famous book about the financial crisis.</p><p>(Also: a movie.)</p><p>But so while <a href="https://twitter.com/TheStalwart/status/701797393096900608">a problem with this trade</a> is certainly that people are calling it the next "Big Short," that these loans are of shorter duration and smaller magnitude, not to mention backed by a readily re-possessed asset, makes them not nearly as potent a shorting opportunity as a house. </p><h2>Oil</h2><p>So, the International Energy Agency doesn't want to make a call about what oil prices definitely will or won't do.</p><p>But. </p><p><span>"It is very tempting, but also very dangerous, to declare that we are in a new era of lower oil prices. But at the risk of tempting fate, we must say that today's oil market conditions do not suggest that prices can recover sharply in the immediate future - unless, of course, there is a major geopolitical event," <a href="http://www.businessinsider.com/iea-says-seems-like-new-era-of-lower-oil-2016-2">the IEA wrote in a report out Monday</a>.</span></p><p>Nice hedge.</p><p>The IEA added: "The world of peak oil supply has been turned on its head, due to structural changes in the economies of key developing countries and major efforts to improve energy efficiency everywhere."</p><p>The basic thesis is that everything we knew about oil was wrong. Peak oil? Wrong. Shale won't last? Wrong. Saudi Arabia and their gulf peers have a total lock on the market and control of prices? Wrong.</p><p>And so here we are, oil is rallying and we're still looking at WTI trading near $33 a barrel. It wasn't that long that $100 was normal(ish).</p><h2>Insurance</h2><p>Warren Buffett is expected to publish his latest letter to shareholders on Saturday.</p><p>As we get closer to that date expect us to roll out some reflections from his recent letter(s) as we look forward to Buffett's notes on a 51st letter to Berkshire Hathaway shareholders.</p><p><em>(Disclosure: I am a shareholder.)</em></p><p><a href="http://www.businessinsider.com/warren-buffett-on-float-2016-2">And so for today, here's Warren Buffett on float</a>:</p><p style="padding-left: 60px;">So how does our float affect intrinsic value? When Berkshire's <em>book</em> value is calculated, the <em>full</em> amount of our float is deducted as a <em>liability</em>, just as if we had to pay it out tomorrow and could not replenish it. But to think of float as strictly a liability is incorrect; it should instead be viewed as a revolving fund. Daily, we pay old claims and related expenses - a huge $22.7 billion to more than six million claimants in 2014 - and that reduces float. Just as surely, we each day write new business and thereby generate new claims that add to float.</p><p style="padding-left: 60px;">If our revolving float is both costless and long-enduring, which I believe it will be, the true value of this liability is dramatically less than the accounting liability. Owing $1 that in effect will never leave the premises - because new business is almost certain to deliver a substitute - is worlds different from owing $1 that will go out the door tomorrow and not be replaced. The two types of liabilities are treated as equals, however, under GAAP.</p><p style="padding-left: 60px;">A partial offset to this overstated liability is a $15.5 billion "goodwill" asset that we incurred in buying our insurance companies and that increases book value. In very large part, this goodwill represents the price we paid for the float-generating capabilities of our insurance operations. The cost of the goodwill, however, has no bearing on its true value. For example, if an insurance company sustains large and prolonged underwriting losses, any goodwill asset carried on the books should be deemed valueless, whatever its original cost.</p><p style="padding-left: 60px;">Fortunately, that does not describe Berkshire. Charlie and I believe the true economic value of our insurance goodwill - what we would happily pay for float <em>of similar quality</em> were we to purchase an insurance operation possessing it - to be far in excess of its historic carrying value. Under present accounting rules (with which we agree) this excess value will never be entered on our books. But I can assure you that it's real. That's one reason - a huge reason - why we believe Berkshire's intrinsic business value substantially exceeds its book value.</p><h2>Additionally</h2><p><a href="http://www.businessinsider.com/sovereign-wealth-funds-selling-2016-2">Sovereign Wealth Funds look set to pull money out of the market</a>. </p><p><a href="http://www.businessinsider.com/stefanie-williams-response-to-yelp-employee-talia-jane-2016-2">A 29-year-old millennial ripped a 25-year-old millennial that got fired from Yelp after complaining about her pay in an epic Medium post published this weekend</a>. </p><p><a href="http://www.businessinsider.com/oscars-2016-predictions-2016-2">Oscar predictions</a>. </p><p><a href="http://www.businessinsider.com/ted-cruz-rick-tyler-resign-2016-2">Ted Cruz asked his top spokesman to resign for spreading a 'false' Marco Rubio story</a>.</p><p><a href="http://www.businessinsider.com/over-half-of-americans-think-apple-should-unlock-san-bernardino-iphone-2016-2">Over half of Americans think Apple should unlock the San Bernardino shooter's iPhone</a>.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/cam-newton-carolina-panthers-press-conference-nfl-denver-broncos-super-bowl-2016-2"> Here's the question that prompted Cam Newton to storm out of his postgame press conference</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="VoZG5yMDE6VHP_GWa6so3qlVcSAMa9_y" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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