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From the cyclical monthly high in interest rates in the 1990-91 recession through June of this year, the 30-year Treasury bond yield has dropped from 9% to 3%. This massive decline in long rates was hardly smooth with nine significant backups. In these nine cases yields rose an average of 127 basis points, with the range from about 200 basis points to 60 basis points (Chart 1). The recent move from the monthly low in February has been modest by comparison. Importantly, this powerful 6 percentage point downward move in long-term Treasury rates was nearly identical to the decline in the rate of inflation as measured by the monthly year-over-year change in the Consumer Price Index which moved from just over 6% in 1990 to 0% today. Therefore, it was the backdrop of shifting inflationary circumstances that once again determined the trend in long-term Treasury bond yields. ... In almost all cases, including the most recent rise, the intermittent change in psychology that drove interest rates higher in the short run, occurred despite weakening inflation. There was, however, always a strong sentiment that the rise marked the end of the bull market, and a major trend reversal was taking place. This is also the case today. ... Presently, four misperceptions have pushed Treasury bond yields to levels that represent significant value for long-term investors. These are:
1. The recent downturn in economic activity will give way to improving conditions and even higher bond yields.
2. Intensifying cost pressures will lead to higher inflation/yields.
3. The inevitable normalization of the Federal Funds rate will work its way up along the yield curve causing long rates to rise.
4. The bond market is in a bubble, and like all manias, it will eventually burst.

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Levi Strauss may have invented jeans, but it never saw yoga pants coming. Inside the effort to win back the hearts, and butts, of shoppers ... At the foot of Telegraph Hill in San Francisco, in a renovated grain mill with soaring ceilings and wooden beams, Bart Sights is refining his recipes for denim. In his hands, stained dark blue from day after day of plunging fabric into buckets of indigo dye, he holds a list of steps for creating a particularly vexing style: women’s skinny jeans. Most such jeans contain so much synthetic fiber they appear slick, cheap, and unlike real denim. Sights has been searching for a way to give the fabric just the right amount of stretch, in just the right places—enough to flatter the figure, but not so much that they stop looking like jeans. ... The company, founded in 1853, has survived the Civil War, the Great Depression, and other epochal threats, but in the last two years it’s been tormented by an enemy none of its executives saw coming: yoga pants.

"Michelangelo and da Vinci, all of them were float builders, so I'm in pretty good company," he says, with characteristic humility. Listening to the monologue is Barry Kern, Blaine's 52-year-old son, who does not share his dad's propensity for self-revelation. Asked about some outrageous antic of his father's, Barry usually shrugs and says, "That's just Blaine being Blaine." ... But Barry wasn't so sanguine in 2010, when he started slapping his father with lawsuits in a spat that nearly destroyed their venerable company and threatened to derail New Orleans's most beloved--and lucrative--tradition. ... The elder Kern built his first float in 1947 and has since helped make Mardi Gras in New Orleans a world-renowned event through his artistry, luck, and relentless self-promotion. Barry quietly turned what is now called Kern Studios into a more professional operation after he became its president in 1994, quadrupling revenue to $40 million and expanding the business with theme park attractions in Las Vegas, Europe, and Asia. ... Today's high-end floats sport dazzling visual effects and can cost $1 million.

Mathur explains how he and his company, Yulex, hope to break the Asian rubber monopoly using gene sequencing and an unassuming desert plant. ... what he’s trying to do here in the desert, with a plant called guayule. ... Mathur tears a stem from one shrub and peels back the bark, pointing to a thin layer of, well, softness. This is called parenchyma. You can use it to make rubber, and that means you can make wetsuits, condoms, gloves, catheters, angioplasty balloons, and so many other medical devices. But most importantly, you can make tires. Car tires. Truck tires. Aircraft tires. In fact, this sort of natural rubber is essential to making tires. Yes, we now have synthetic rubber, but that isn’t as strong as the natural stuff. Our automobile tires contain about 50 percent natural rubber, and you simply can’t make a truck or aircraft tire without it. ... Today, almost all natural rubber comes from hevea rubber trees grown in Southeast Asia, and that hangs a nightmare scenario over US tire makers and the wider US economy. In the event of war or natural disaster, our supply could vanish, and rather quickly. But guayule can provide an alternative. Since the early 20th century, American researchers, entrepreneurs, and statesmen have eyed the plant as a way of freeing the U.S. economy from this deep dependence on Asia. Rubber trees don’t do well in the US, but guayule does. It’s indigenous to Mexico and the American southwest.

It’s interesting how people cannot see beyond what they’re used to. ... If you use technology correctly, you can change opinions overnight. ... We focused on the story and hiding the technology. ... It’s not the technology that entertains people, it’s what you do with the technology. ... your work will not be about the technology. It will be about connecting and entertaining people. ... If you create characters people connect with and tell stories that deeply entertain and move them, the audience will come.

When Ted Turner entered his yacht Tenacious in the famed Fastnet Race in 1979, he did not need to prove himself. Turner already had the following on his résumé: founder of a television network, owner of the Atlanta Hawks and Braves, and, most appropriate here, winner of the 1977 America’s Cup. Still, he loved to sail and loved to race with his crew of carefully selected mates. This race would prove to be like no other Turner had ever entered when a freak storm turned the Celtic Sea into chaos. When the winds stopped and the race was over, many of the 303 entrants hadn’t even finished and, tragically, 15 sailors had lost their lives. The victorious crew of the Tenacious relive the voyage, of which Turner famously said: “I was more afraid of losing than I was of dying.”

Years ago Indra Nooyi made an audacious strategy shift beyond unhealthy snacks and drinks. She was prescient—as well as disciplined and tough—but the challenges are still daunting. ... The infractions might seem insignificant—one missing can of Pepsi on one shelf in one store in one city in one country—but for Nooyi it is this level of detail that sets her company apart. “We ought to keep pushing the boundaries to get to flawless execution,” she declares. “Flawless is the ultimate goal.” ... You can’t blame anyone at PepsiCo for feeling a sense of urgency—or embattlement—in recent years. Their staple products, soda pop and potato chips, are only slightly less demonized these days than cigarettes. ... now in her eighth year in the grueling crucible that is the leadership of one of America’s most globally recognized brands, it just may be a moment to exhale. You could even call it vindication. From the start of her tenure she dared to acknowledge what was obvious to everyone outside the business but unutterable to those inside it: Junk food makes people fat and harms their health. Nooyi began emphasizing products that are at least a bit healthier than the traditional chips and soda—a pivot some observers thought could sink the company. Now shoppers are proving her right.


Subaru can barely make enough cars to meet demand and has the best profit margin in the industry. But expanding might jeopardize what makes it work so well ... Since 2011, Subaru’s global sales have surged 45 percent to 913,100 vehicles, a pace bested only by a few burgeoning Chinese brands and Fiat Chrysler which has been intent on making Jeep a popular choice in Europe and Asia. ... Almost any car company one can name is far bigger than little Fuji Heavy Industries, Subaru's parent. BMW? More than twice the size in terms of unit sales. Kia? Almost three Subarus. Even Mazda sells 50 percent more cars. ... Being small, though, is the reason Subaru has become such a big deal. With manufacturing capacity maxed out, it now has to decide what kind of company it wants to be. ... Traditionally, the company has spurned the volume game for steadier prices and better relationships with its dealers. Because supplies are so tight, a Subaru sitting on a sales lot right now might be the closest thing the car business has ever seen to a fixed price. Last month, the average incentive on a Subaru in the U.S. was a minuscule $481, compared with almost $2,000 on a Mercedes and almost $3,000 on a Ford. This is also why Subarus today retain their value better than any other brand, according to a TrueCar analysis.

How an artificial language from 1887 is finding new life online ... Like its vastly more successful digital cousins — C++, HTML, Python, Linux — Esperanto is an artificial language, designed to have perfectly regular grammar, with none of the messy exceptions of natural tongues. Out loud, all that regularity creates strange cadences, like someone speaking Italian slowly while chewing gum. William Auld, the Modernist Scottish poet who wrote his greatest work in Esperanto, was nominated for the Nobel Prize multiple times, but never won. But it is supremely easy to learn, like a puzzle piece formed to fit into the human brain. ... Decades before Couchsurfing became a website (or the word website existed), Esperantists had an international homestay service called Pasaporta Servo, in which friendly hosts around the world listed their phone numbers and home addresses in a central directory available to traveling Esperantists. It may be a small, widely dispersed, and self-selected diaspora, but wherever you go, there are Esperantists who are excited that you exist. ... There’s no money, no power, no marketing, no prestige — Esperanto speakers speak Esperanto because they believe in it, and because it’s fun to speak a foreign language almost instantly, after a couple months of rolling the words around in your mouth. ... Esperanto was invented in 1887 by a Polish ophthalmologist named L.L. Zamenhof, who hoped his creation would bring about world peace. Zamenhof saw a turbulent world divided by language, and concluded that the situation was too complicated, essentially unfair, and ultimately doomed. He believed that the languages people already spoke were oversaturated with history, politics, and power, making it impossible to communicate clearly. Esperanto was a fresh start, a technology that would allow its speakers to sidestep the difficulties of natural languages altogether.

I flew to Somalia in early 2012 to write about a pirate gang jailed in Hamburg. They had been captured two years earlier when they tried to hijack the MV Taipan, a German cargo ship, near Somalia. Their marathon trial represented the first proceeding on German soil against any pirate, Somali or otherwise, in more than four centuries. I had reported on the case for Spiegel Online, where I worked in Berlin, and it seemed to me that a book about the case and some underreported aspects of Somali piracy might be interesting. ... Gerlach assured us that we would be safe, and his friend, the regional president, sent a personal car. A Somali gunman rode with us. But by then it was too late. We had been researched. I pieced this together only months after, when a pirate showed me an image of my own face on his phone. The pirates had pulled an author photo of mine from an old New York Times interview. I’m a dual citizen, and I had travelled to Somalia on a German passport; but they knew I was an American writer. ... A hostage does nothing, but the long hours are a crisis of longing. My sense of self, in fact my sanity, would surge and ebb. I tended to wake up in a stark panic and pray for no greater mercy than the dawn.