Welcome to I Found This - a weekly competition between two old friends, your hosts, James and Keith. Here each week, you’ll decide who’s find made your eyebrow raise higher.

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 Happy Monday!

Santa Claws

The streets are filled with snow.  A plump marshmallow bulges through the dark chocolaty goodness in your oversized mug. A tree fills the room with pure, unadulterated coziness while you watch Will Ferrell convince Zooey Deschanel to drink the “world’s greatest cup of coffee” for the 10,000^th time. Of course, there’s only one holiday worthy of such ceremony. It’s the very same day that enjoys its own genre of music and its own category on Netflix.    

What comes to your mind when you hear the word, “Christmas?”. I hope many wonderful things. But if you’d travel with me a mere 1698 years to the first council of Nicaea, I bet the word will take on even more meaning from this day forward.

The Nicaean Council was called to address the growing trend of what we now call Arianism in the young Christian Church. Arians, following the teaching of one Arius, a bishop in Alexandria, believed that Christ was created, rather than divine. You might imagine how this sort of claim might not be well received by council-going folks who, you know, worship Christ as the uncreated one – as God who took on flesh. As a result, the council clarified the orthodox Christian teaching on the matter by stating that Christ is of the same substance as God the Father. The council would also slap Arius with a new title of heretic, and he would spend the years that followed in exile.

Many at the council were indignant at Arius’s teaching – but, as the story goes (and PSA, the sourcing on this part of the tale is very late), no one was quite as perturbed by the Arian trend as Nicholas of Myra. When Arius rose to give his defense, Nicholas rose as well. And to everyone’s surprise, so did Nicholas’ right hand. It was the smack heard round the world.

And that, dear friends, is the story of when Santa Clause slapped a heretic. Merry Christmas! - Keith

Grading The Economy On A Curve

Regardless of your political views and how you define “Bidenomics” most Americans report dissatisfaction in some category of the economy. This has been widely reported and the accused sources range from TikTok to Fed Policy. Everyone seems to be asking in a hushed tone, “Is a recession coming?” Often a metric economists and your uncle around the Christmas dinner table will cite is the "Inverted Yield Curve”.

“Yields” imply a relationship between time an money(our checking accounts and bonds have yield rates) and inverted implies there is something wrong:

The above curve is what you should show your uncle. 2 and 10 year treasury bonds are the most often used to illustrate the point that recessions(grey bars) seem to follow when the blue line(yield rate of 10yr bonds - yield rate of 2yr bonds) drops below 0. This should intuitively check out since we usually expect a higher yield or locking up our money for a longer period of time(checking account- low yield, long term bond - higher yield). We expect to be compensated for our commitment. If we can get better guaranteed returns for shorter time periods - something must be wrong.

An inverted yield curve foreshadowed 10/10 of the recessions since the 1950s and signaled a false-positive only once in the 1960s. These recessions have ranged from 6 to 24 months.

The key takeaway? This is one data point in a host of analyses trying to predict economic outcomes. In the end this topic is not a binary - length and severity are hard to tie to the inverted-ness of the curve. But if this Christmas you feel like you’ve been extra good, maybe ask santa for a normal yield curve.

Once again, it is all about the money - James