Tuesday, January 03, 2006

The final act

Comedy often turns into tragedy, right around the final act of the play.

2006 will bring the last few scenes of the US Federal Reserve's Comedy of Hikes.

Will a new hero step in to save the day or will he arrive too late?

Time's up.

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The bond market is literally bending over backwards to get the Fed's attention.

The yield curve is inverted.

This means that investing in a government bond for 2 years earns you a higher rate of interest than investing for 10 years.

Strange, huh?

Yes.



Not funny

Before the yield curve inverted, the Fed relentlessly increased interest rates at a painfully slow rate. A quarter point here, a quarter point there.

No end was in sight.

But as is becoming commonplace in today's damn the future society, the light at the end of the tunnel was a truck heading straight for us.

It won't be easy to turn around in time and avoid the crash.

As the chart shows, when the yield curve has inverted, the stock market gets edgy.

What's worse, the economy either contracts or slows considerably.

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Either a recession or a slowdown of the US economy now look inevitable. The latter much more than the former.

Of course, if that truck were to be carrying a load of explosives we might be in for even more trouble!

(English translation: the US economy is now more vulnerable to a recession following a terrorist attack than at any time since 2001).

Breaking news

It could have been so beautiful.

24-hour news: there whenever you needed it.

News on Demand.

The concept seems so old now. And tired.

News is broken.

It's time to fix it.

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Humans have an insatiable appetite for news (especially bad news).

We read a newspaper everyday. Why?

To learn more about the world around us.

We want to learn about the world us.

We expect news every day.

Bad news: there isn't news every day!

Hold the presses, please!

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Can you imagine a day when there isn't any news?

How would you know?

You wouldn't.

News can be whatever news companies want it to be.

Whatever sells is news. And we buy it, every single day.

This is wrong. This will stop.

When?

When we stop buying news.

If you are paying for the news you receive it's like adding fuel to the fire.

The more money you pay to receive the news the more money news organisations receive to produce more news!

Thanks to all the 24-hour news that's been shoved down our throats over the years we've learnt the difference between information we need to know and news.

In a true "Information Age", we choose what news we want to read. And we don't pay anyone for it. (e.g. Google News).

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When we look back on changes they make sense.

It's even more interesting to look at those changes while they're taking place (hint: this can be a great way to make a lot of money).

The past few years has seen news broken and bridges gapped.

The bridge is between ignorance and knowledge.

Thanks to 24-hour news, we know so much more about the world around us.

This education has been the raison dĂȘtre of 24-hours news. For that we are thankful.

But it's come at a price.

Now that it's served it's purpose, 24-hour news can stop and we, the masses, can move on to the next stage of enlightenment...