• The $1.3 trillion student-loan market is a "bubble," Goldman Sachs strategists said in a recent note. 
• The banks believes the market for asset-backed securities refinanced by private lenders like SoFi "may offer relative value" compared to public student-loan securities.
• Asset-backed securities bundle pools of loans with similar risks that investors can profit from when former students make their payments. 
• Although student loans are in a bubble, Goldman doesn't see them as a risk to overall financial stability.

Student loans have grown to become the largest source of consumer debt in the US besides mortgages.

According to Goldman Sachs, the outstanding student loan balance has reached $1.3 trillion in face value, about the size of the high-yield corporate-bond market. This outstanding debt is not without problems, as it delays homeownership for some millennials and cuts their disposable income. 

Although the "bubble" is getting bigger, it's not a risk to overall financial stability, Goldman's Marty Young and Lotfi Karoui said in a recent note. In fact, there's one segment of the market that's emerging as an attractive investment.

It's the $190 billion of outstanding loans that are held within asset-backed securities (ABS) refinanced by private lenders such as SoFi.

With these securities, lenders pool loans that have similar risk profiles and sell them as instruments in the public markets. Investors profit as graduates pay back their principal and interest. 

"The new so-called 'marketplace' student loan ABS sector — involving private refinance loans made to super-prime borrowers — has so far had strong credit performance, and may offer relative value vs. public student-loan ABS," said Goldman's Marty Young and Lotfi Karoui in a recent note. $150 billion of asset-backed securities (ABS) are associated with loans that are guaranteed by the US government. 

"Recent marketplace student loan deals have featured borrower pools with average credit scores above 770 and average borrower incomes above $160k: a very different credit profile than the government guaranteed portfolios." 

Student-loan asset-backed securities have been popular with investors this year, along with other types of risky credit securities like junk bonds, as the hunt for higher yield intensified.

Because spreads on student-loan ABS have tightened a lot this year, Goldman doesn't see much scope for further gains in the broader sector.

But the market for securities associated with privately refinanced loans remains attractive. 

Goldman also urges caution. Student loans may be second to mortgages by the outstanding debt load, but overall, missed payments dwarf the lending market for housing. Also, it's still a relatively new part of the market, meaning that it may be challenging to build predictive models for it.

However, "the low loss rates to date suggests that the small but growing sector may be worth a look," Goldman said.

SEE ALSO: Rich homeowners in blue states are among the biggest losers in the GOP tax plan

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LONDON — It was 2012, and Kathy Caton was out for a morning run on the Brighton seafront following a long night of gin-drinking when she had her "lightbulb moment."

Gin, known for its forgiving hangovers, was starting to grow in popularity thanks to the early efforts of craft distillers like Sipsmith, and Brighton needed its own version.

"Gin is the one drink that lets you get away with it and Brighton is the place that needs to get away with it on a frequent basis," Caton told BI.

Three years after it launched, Brighton Gin is an entrepreneurial success story. The small-batch distillery was named the UK's best gin at the People’s Drinks Awards in June, and sales have rocketed since. Year-on-year sales are up 60% this year, annual turnover hit £500,000, and sales reached 1,000 units a week in the run-up to Christmas.

In some ways, Brighton Gin's success seems improbable. Caton had spent her career working as a radio broadcaster and running pubs and restaurants, and had "b****r all" clue about how to go about creating a gin. So how do you begin to create one from scratch?

The answer, Caton says, was a "shedload" of research, a team of helpful friends which included a laser physicist, and years of painstaking recipe-testing.

"We got a still off eBay, we made tonnes of mistakes and experiments, and I tried to dust off my ancient chemistry knowledge from school," she says.

"I'm now really glad we went through that process of learning about the mechanics of it and the tiny things you can do to vary the result of the recipe."

The basic idea behind gin is simple enough: it is formed of a base spirit, plus juniper berries, plus a host of botanicals, brought together in a still.

Caton says it is that simplicity which means there is such a variety between gins, but also what makes a good recipe so hard to come by. A bottle of Brighton Gin — which arrives hand-sealed with a wax lid — includes contains coriander grown in the UK, milk thistle from the South Downs, and fresh orange and lime peel.

"I always use the analogy of making a soufflé. Theoretically, it's incredibly simple, but there are 300,000 different ways you can screw it up," she says.

When Brighton Gin finally launched in December 2014 — "much later than we initially thought" — Britain was undergoing something of a craft gin revolution. The once disreputable spirit the Victorians called “Mother’s Ruin” was transforming into a product altogether more upmarket and desirable: Distillery openings in 2015 increased by 50% year-on-year, expensive tonic maker Fever Tree floated on the stock exchange in a move worth hundreds of millions of pounds, and gin sales hit a record £400 million.

Fast-forward to 2017, and there are more than 500 craft gin distillers in Britain alone. Is Caton worried the bubble will burst?

"I think it will contract at some stage, but bubble's probably the wrong word," she says. She's confident that craft gin's popularity is more than the fad which has come to characterise many food trends in Britain, and cites the enduring popularity of craft beer as evidence.

"We're following what's happening to craft gin based on what's happened to the craft beer movement. The amount of knowledge and passion and interest that people from all sections of society have got about craft beer is really interesting.

"Five years ago I can't imagine that I'd go to a pub and buy a can of beer for £6, but there's been a wave of interest in provenance and the stories behind products. It's a really positive thing that people are interested in their food and where it's coming from," she says.

Next year's target is moving into international export markets, where British gin sales are through the roof.

Over 60% British gin is currently exported — a figure which is growing — and Caton believes the popularity of Brighton with overseas tourists put her in a strong position to sell into countries which drink a lot of gin, particularly in Asia.

"We have 11.4 million visitors a year coming to Brighton. If a quarter of those can go back to their home countries either taking a bottle of Brighton gin or knowing about it, it represents a huge potential for us," she says.

Caton also aims to double revenue next year, a target which she admits is ambitious given the firm's currently small production capacity.

"We'd rather aim for it and fall a bit short than not have that ambition," she says.

"If we fall short, there's always nice gin at the end of the day. I still think a gin and tonic is the most perfect drink ever invented."

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• The best way to watch for the next big market bubble is to watch tech companies, says Bank of America Merrill Lynch.
• In particular, investors should be watching for divergence between tech stocks and tech companies with high-yield credit ratings.

For signs of the next big market bubble, your best bet is to watch tech companies.

After all, the tech bubble that swelled in the late 1990s, then burst in spectacular fashion in the early 2000s, is one of the most glaring examples of investor overexuberance in recent memory.

So in order to prepare for the inevitable next bubble, Bank of America Merrill Lynch recommends watching the relationship between stock prices and bond yields in the tech sector. As shown in the chart below, the tech-heavy Nasdaq index has been closely tracking the ratio between tech stocks with a junk bond rating and those with investment-grade credit.

But that wasn't always the case. In the time around the dotcom bubble, the two measures traded independently of one another. BAML says to watch for this type of divergence, because it's likely to occur when another bubble is swelling.

The next bubble will likely follow the template established during prior instances, and not just those that occurred in the US, says BAML. Generally speaking, previous bubbles have been characterized by similarly torrid gains in stock prices and bond yields. BAML provides three particularly high-profile examples:

• Japan, 1989 — The Nikkei surged 31% as Japanese government bond yields rose 170 basis points
• US, 1999 — The Nasdaq Composite index exploded 230% higher as Treasury yields increased 220 basis points
• China, 2007 — The Shanghai Composite index soared 200% as Chinese yields climbed 160 basis points

With this warning in mind, it's important to note that BAML chief investment strategist Michael Hartnett has been making bearish proclamations for months. A month ago, after a fund manager survey conducted by his firm showed a record number of investors are taking higher-than-normal risk, Hartnett said that the market was showing "irrational exuberance."

He's also noted that expectations around a "Goldilocks" economy — one characterized by high growth and low inflation — are at an all-time high. And even before that, in July, he warned that central-bank tightening could pop what he described as a bubble in risk assets.

But just because the reckoning hasn't struck yet doesn't mean the market is in the clear, with potential bubbles slowly forming across a number of asset classes. Considering the historical precedent that's been set, Hartnett's warnings should still be heeded. So keep an eye on tech.

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• The big theme in tech this year was consolidation — not in terms of mergers and acquisitions, but in the big companies extending their reach and trying to conquer new markets. 
• The most important deal of the year, though, was Amazon's $13.7 billion acquisition of Whole Foods.
• In one swoop, Amazon totally disrupted groceries, retail delivery, and even the enterprise IT market. 
• Next year will be all about Everyone versus Amazon.

The tech industry loves to talk about small, nimble startups. 

In reality though, the tech gameplan today is all about bulking up, and getting as big as possible.

Mega-mergers, such as Broadcom's pending $105 billion acquisition of Qualcomm and Dell's $67 billion purchase of EMC in 2016, underscore the industry's never-ending frenzy to consolidate.  

And in 2017, the tech giants sought to project their power even further. Facebook built its lead on Snapchat by gradually swiping away the best part of the upstart's app. Apple released a new iPhone designed to conquer augmented reality, the next frontier. Microsoft took swipes at Amazon, Apple, and even startups like Slack. Google doubled down on building its own hardware. 

To my mind, though, the single biggest and most aggressive move this year was by Amazon, with its $13.7 billion acquisition of Whole Foods. It wasn't a tech deal, in the traditional sense. But it caused ripples that go beyond just groceries — ripples that are slowly turning the entire US economy into a case of Amazon versus everybody else.

The first ripples were pretty obvious: Amazon immediately started lowering prices at Whole Foods, putting the pressure on rivals like Kroger to compete amid sliding share prices. Now that Amazon is hinting at more discounts to come for Amazon Prime members, that pressure will only intensify.

Then, came something a little less expected, but more obvious in retrospect. In the wake of the Amazon-Whole Foods deal, megacorps like Target and Walmart hustled to ink deals to let customers shop their wares via Google, which is emerging as Amazon's main rival. Similarly, smaller retailers are going to startups like Instacart to help give them Amazon-style same-day delivery options. 

And then, the Whole Foods acquisition has resulted in shockwaves across the cloud computing market, where Amazon and its massively profitable Amazon Web Services reigns supreme.

In the wake of the Amazon/Whole Foods tie-up, Walmart reportedly issued an ultimatum to its vendors: Quit AWS and start using competitors like Microsoft Azure or Google Cloud — or else. Kroger, too, recently discussed its intention to avoid AWS altogether. 

In other words, Amazon spent $13.7 billion — just slightly more than the $13.2 billion Google spent on Motorola in 2011 — and managed to cause upheaval across the grocery retail sector, the major superstore chains, and even enterprise IT. 

It's a mark of how seriously Corporate America now takes Amazon: When Amazon acts, the world reacts. And as we enter 2018, it's becoming clear that either you're against Amazon, or eventually, you might just become part of Amazon.

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• Personal trainer Max Lowery always exercises caffeinated.
• He will have green tea or green tea extract 30 minutes before he works out.
• Some studies have found that caffeine can boost fat-burning during exercise.

In the time-poor world that we live in, everyone wants to make the most out of their gym sessions. And during the festive period it's even harder to get there in the first place.

With this in mind, Business Insider asked 27-year-old personal trainer Max Lowery, the man behind the 2 Meal Day diet plan, about his pre- and post-workout routines for getting the most out of his training sessions.

He previously told us that he has never touched a protein shake in his life, but there is one thing he always does before a workout.

Training caffeinated

Lowery, a former professional sprinter, told Business Insider that before a workout is pretty much the only time he uses caffeine in his diet. But he always trains caffeinated.

While not a coffee drinker, he'll have either a strong green tea or take green tea extract about 30 minutes before he works out. A black coffee could also work, he said.

There have been a number of studies conducted into the effects and benefits of using caffeine while exercising. Although it should be noted that most research in this field that Business Insider came across while writing this article was carried out with relatively small samples.

One study conducted by a group of Australian doctors published in the Journal of Applied Physiology found that when 14 recreationally active participants took part in a controlled rest trial, a placebo exercise trial, and a caffeinated exercise trial — the latter resulted in significantly greater energy expenditure and fat burning.

The caffeinated exercise trial was found to create a greater energy deficit. It also led to exercise being perceived as "less difficult and more enjoyable," it found.

Caffeine as a pain suppressant

Some athletes favour caffeine for another reason as well, according to Lowery. "Caffeine can also be used as a pain suppressant and so not only will you have more energy but you’ll be less sensitive to the pain from a workout."

And he points to a study conducted by the Department of Kinesiology, University of Alabama. For context, it said that while "ergogenic effects of caffeine on aerobic or endurance exercise are well documented," its impact on "high-intensity, primarily anaerobic performance, was not well understood."

It sought to examine the effects of caffeine on number reps, ratings of perceived exertion, and peak heart rate during resistance training with reps performed by 17 participants to fail.

It found that caffeine was associated with significantly higher reps and concluded that this suggests "caffeine can blunt pain responses, possibly delaying fatigue in high-intensity resistance training." 

It ought to be noted that British health service guidelines state that "caution should be taken by individuals thinking of drinking coffee, or taking anything else, to try and 'take the pain out of exercise.'

"In people not accustomed to exercising, excessive muscle or joint pain during exercise should be an indication that the exercise level is too intense."

The benefits of green tea

Lowery is particularly convinced by the benefits of green tea before a workout.

"When I used to sprint, I would sip strong cold green tea throughout the day at my competitions," he said.

"Studies have shown that green tea can increase the rate of fat-burning while exercising. It helps to inhibit the enzyme that degrades the body's primary fat-burning hormone, norepinephrine."

Ewa Jówko concluded in her chapter "Green Tea Catechins and Sport Performance," published in Antioxidants in Sport edited by Dr.Manfred Lamprecht, that the consumption of green tea catechins — the major component of green tea extract — has been shown to increase fat-burning and energy expenditure, particularly if combined with caffeine.

"This effect was seen in both sedentary and physically active individuals during exercise," she wrote.

So before you next hit the gym, it might be worth putting the kettle on. 

SEE ALSO: A personal trainer explains why you should always do your weight training before your cardio at the gym

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• Cybersecurity firm Secureworks discovers malware in fake bitcoin job advert email.
• Coding suggests that North Korea's Lazarus Group is behind the attack.
• Unclear what the aim of the attack is or how many people have been targeted.

LONDON — North Korean hackers are targeting people in the cryptocurrency industry using phishing emails.

Cybersecurity company Secureworks discovered a fake job advert email supposedly from a "prominent bitcoin company" headquartered in the UK that installs malware on people's computers when opened. It's not clear whether the hack is intended to steal information or any bitcoin owned by people who open the email.

Rafe Pilling, a senior security researcher at Secureworks, told Business Insider the coding of the attack bore hallmarks of the Lazarus Group, an infamous group of North Korean hackers linked to the WannaCry ransomware campaign and the theft of $81 million from Bangladesh's central bank.

The attack involves an email sent to people supposedly advertising a job as the chief financial officer of a fast-growing UK-headquartered cryptocurrency startup. Secureworks is not naming the startup in question.

When people open the email, they are presented with a pop-up about an attached word document. After clicking on the document, recipients are presented with a word document of the fake job ad. But in the background, a "Remote Access Trojan" malware is installed. "The malware that's downloaded is the first stage RAT that gives them basic systems survey capability and the ability to download further malware if they find they've landed an interesting target," Pilling told BI.

'We're not talking about five people in a room'

Pilling, who is part of Secureworks' Counter Threat Unit, said the attack was likely state-sponsored.

"North Korea is perhaps unique in that there's such tight control over all forms of communication," he said. "We don't believe there's anything that state organised cyber activity that comes out of that country. We would see it as having some degree of state direction or state approval."

He added: "There's a significant capability behind this threat actor — we're not talking about five people in a room."

The Lazarus Group has used similar attacks to target staff in the defence industry in a bid to gain knowledge about missiles. The move toward bitcoin is relatively new, Pilling said.

"For us, the interesting thing is the shift to bitcoin. The interest in cryptocurrency aligns with anecdotal evidence we've seen from others sources and our own research."North Korean hackers stole about 100 million Korean won, or $88,000, worth of bitcoin from South Korean exchanges every month from 2013 to 2015, according to Yonhap News Agency. Security researchers FireEye said earlier this year that North Korean hackers have shown increasing interest in bitcoin over the last two years.

Pilling said: "There's definitely a pattern over the past two years of an interest in stealing money from banks, potentially collecting bitcoins through extortion using ransomware, and then potentially stealing it from bitcoin exchanges. There's really nothing off the table when it comes to these threat actors."

Secureworks discovered the phishing attack on a database of malware attacks that it monitors. As a result, it is not sure how many people have been targeted, how successful it has been, or if it has been used at all.

But Pilling said: "I would suspect that this lure would have been used in one mail shot and they'll probably move on to something else, although they'll use the same macro [the malicious code].

"The group, in general, is very active and continuously active. We only see glimpses of the overall operation and this is just one fragment of multiple different things that are coming out of cyber operations we associate with North Korea."

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