Financial Markets and Economy
Putting Economic Models in Their Place (Brad DeLong, Project Syndicate)
When policymakers turn to economists for guidance, they expect the advice they receive to be grounded in science, not academic factionalism or political presuppositions. After all, the policies they will be putting in place will have real implications for real people. Unfortunately, however, sound science is not always the driving force behind economic analysis and policy recommendations.
In a recent critique of what he calls the “mathiness” of modern economics, Paul M. Romer of New York University argues that economists should take measures to exclude academic factionalism and politics from the dismal science. Romer grounds his case in an ongoing debate in his field about the role that ideas play in promoting economic growth.
Twitter has #AdviceforYoungTraders who’ve never seen a Fed rate hike (Market Watch)
“Never play macho man with the market,” always “identify your risk tolerance,” and most of all, “if you’re afraid — don’t do it. If you’re doing it — don’t be afraid.”
This last one is actually a Genghis Khan quote, but it was also one of the top gems under the #AdviceForYoungTraders hashtag, which went viral on Twitter Friday.
The hashtag was among the top trending on Twitter, populating feeds with advice like “keep your cost basis low” and “don’t fight the Fed on a nasty dunk.”
It all started with a simple observation: two-thirds of traders on Wall Street have never seen a full Fed tightening cycle, as a Bloomberg article pointed out.
Ruble, oil rebound boost Russia-focused hedge funds (Market Watch)
As the second largest oil exporter in the world after Saudi Arabia, no economic narrative on Russia is complete without referencing oil.
A strong rebound in oil prices since January has been a boon to the Russian economy, bolstering its currency and sparking a rally in stocks, making the investment pariah of 2014 once more palatable to investors.
Fannie Mae: Mortgage Serious Delinquency rate declined in April, Lowest since September 2008 (Calculated Risk)
Fannie Mae reported today that the Single-Family Serious Delinquency rate declined in April to 1.73% from 1.78% in March. The serious delinquency rate is down from 2.13% in April 2014, and this is the lowest level since September 2008.
Trying To Make Sense Upside Down (Alhambra Partners)
Yesterday I looked at funding markets and currency proxies for detecting the end to the “dollar” pause that began on March 18. Broader credit markets agree with that assessment so far, as nominal yields and the UST curve shape have started, at least, to be redrawn back into the tightening format. Nominal yields and inflation breakevens turned right at May 6 when Janet Yellen spoke more of the common sense that should be the default setting for monetary everything.
Wood carves out a bigger share of U.S. energy market (Market Watch)
Wood is the U.S. second largest renewable energy source, thanks in part to rising demand for wood pallets for space-heating stoves.
Philly Fed: State Coincident Indexes increased in 40 states in April (Calculated Risk)
The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for April 2015. In the past month, the indexes increased in 40 states, decreased in six, and remained stable in four, for a one-month diffusion index of 68. Over the past three months, the indexes increased in 45 states, decreased in three, and remained stable in two, for a three-month diffusion index of 84.
Robert Shiller: Unlike 1929 This Time Everything – Stocks, Bonds And Housing – Is Overvalued (Zero Hedge)
Robert Shiller is a professor of economics and finance at Yale University. He is the author of Irrational Exuberance, which in 2000 predicted the collapse of the tech bubble and is now in its third edition. He was awarded the Nobel Prize in Economic Sciences in 2013 for his work on asset prices and financial market behavior.
In Denial: We Pursue Endless Growth At Our Peril (Peak Properity)
As we've been discussing of late here at PeakProsperity.com, humans desperately need a new story to live by. The old one is increasingly dysfunctional and rather obviously headed for either a quite dismal or possibly disastrous future. One of the chief impediments to recognizing the dysfunction of the old story and adopting a new one is the most powerful of all human emotional states: Denial.
Stocks and Trading
Drawdown Diagnosis: Understanding Why You Are Losing Money (TraderFeed)
When you experience a drawdown in your profitability, the most important thing you can do is accurately diagnose what is going on. There are three possibilities:
1) Nothing is going on – The drawdown is normal and expectable for you and your trading approach. Unless you have an insanely high Sharpe ratio historically (steady gains, modest losses), you can count on sequences of losing trades and losing days, weeks, and months. You don't want to overreact to every losing period and continually change what you're doing; otherwise, you'd never build expertise in any particular trading modality.
Did you sell in May and go away? Oops! (CNN)
Sell in May and go away. You hear traders say that about the stock market every year.
But if you actually followed that silly piece of advice, you missed out on more gains.
The 52-Week Low Club for Friday (24/7 Wall St)
Alcoa Inc. (NYSE: AA) posted a new 52-week low on Friday. Shares dropped about 1.9% to $12.44 from Thursday’s closing price of $12.68. The stock’s 52-week high is $17.75. Volume totaled about 14.5 million shares, well below the daily average of around 25.3 million shares. The company had no specific news today, but the supply glut of the metal continues to take its toll.
Politics
Obama Warns of Dangers of Inaction on Patriot Act (Time)
"Heaven forbid we’ve got a problem where we could have prevented a terrorist attack"
President Obama warned Friday afternoon of dire consequences for national security should the Patriot Act be allowed to expire on Sunday night.
More on the Right Questions to Ask About Iraq (The Atlantic)
Last week I argued that reporters should not waste one more second of their time or ours asking questions about Iraq that begin, “Knowing what we know now…” Instead, I suggested some other ways of finding out what candidates had learned, or avoided learning, from the military struggles of the past dozen years.
Now Jonah Blank, who has been in the middle of the Iraq and Afghanistan debates of recent years, writes in with some further suggestions about the right questions to ask.
Nebraska's Governor Vows To Proceed With Executions Despite Death Penalty Repeal (Huffington Post)
Nebraska Republican Gov. Pete Ricketts says lawmakers' repeal of the death penalty won't stop his administration from proceeding with executions of 10 people already sentenced to death.
Ricketts said Friday that he doesn't plan to cancel a shipment of lethal injection drugs that the state bought earlier this month.
The GOP-controlled Legislature this week approved a law repealing the death penalty over the governor's veto. The law doesn't go into effect for three months.
Technology
Android M And Chrome Are Finally Doing Something Great For Users (Gizmodo)
The most important news about Android M is how it will handle the way apps get permission to access your private data. That sounds like a humble little technical detail until you realize what a revolution it will be when we can set our own permissions on apps, any time we want. And Chrome is doing it too.
Think about the last time you downloaded an app from Google’s Play store. Before you could install it, a screen full of permissions popped up. Do you want this super important messaging app to access your contacts, calendar, camera, microphone, and location? Um, sure? I guess? I mean, I want this app so I can talk to my family in Canada — but why does it need to access my location and calendar? You probably thought all of these things, and gave the app permission anyway. Or maybe you said screw it, I don’t want an app that makes me give up my location just to chat with my niece in Quebec.
The Large Synoptic Survey Telescope: Unlocking the secrets of dark matter and dark energy (Phys)
At a traditional stone-laying ceremony outside La Serena, Chile on April 14th, construction officially began of the Large Synoptic Survey Telescope (LSST). This ambitious international astrophysics project is slated to start scanning the heavens in 2022. When it does, LSST should open up the "dark universe" of dark matter and dark energy—the unseen substance and force, respectively, composing 95 percent of the universe's mass and energy—as never before.
Apple-Leased Vans Gathering Maps Info for Shift to In-House Mapping Database (Mac Rumors)
For the past several months, Apple-leased Dodge Caravans with equipment-laden roofs have been spotted driving around the United States. While early speculation suggested the vans could be Apple's first attempt at developing a self-driving vehicle, it quickly became clear that the vans were being used for mapping purposes.
The Dodge Caravans are all outfitted with an array of LIDAR cameras, much like the vehicles that Google uses to capture images for its Street View mapping feature, so it is no surprise that a report shared today by 9to5Mac suggests the images and data from the vans is going to be used for future improvements to Apple's Maps feature. Here atMacRumors, we have been aggregating Apple van sightings to give a clear picture of the areas where Apple is currently focusing its attention.
Health and Life Sciences
Lung cancer therapy is 'milestone' (BBC)
Nivolumab stops cancerous cells hiding from the body's own defences, leaving the cancer vulnerable to attack.
The results from 582 people, presented at the American Society of Clinical Oncology, were described as "giving real hope to patients".
Lung cancer is the most deadly type of cancer, killing nearly 1.6 million peopleevery year.
Life on the Home Planet
Great Barrier Reef spared 'in danger' listing – for now (BBC)
However, it says Australia must carry out commitments to protect the reef, including restoring water quality and restricting new port developments.
The final decision on its status will be made at the World Heritage Committee meeting in Germany next month.
Conservationists have warned that the outlook for the reef is "poor".
