Financial Markets and Economy
An Economics Lab Where Theories Go to Die (Bloomberg View)
The main thing you have to understand about macroeconomic theory — both of the type used by academics and the type employed by private-sector forecasters — is that it doesn’t really work.
Negative Interest Rates on 40% of Outstanding European Government Bonds (Ritholtz)
40% of government bonds in Europe now trade with negative interest rates, see chart below.
Yep, US companies tried to hide a ton of bad news from investors last year (Business Insider)
US companies tried to hide a lot of bad news from investors in 2015.
Dow breaks above bullish chart level first time this year (Market Watch)
The Dow Jones Industrial Average and the S&P 500 rise above their widely followed 200-day moving averages for the first time this year, which many chart watchers might see as an early sign suggesting the stock market’s downtrend may be over.
The Fed caused 93% of the entire stock market's move since 2008: Analysis (Yahoo! Finance)
The bull market just celebrated its seventh anniversary. But the gains in recent years – as well as its recent sputter – may be explained by just one thing: monetary policy.
For Hedge Funds, Start of 2016 Offers Little Relief From 2015 (NY Times)
The hedge fund titan Larry Robbins did something out of character last year. He apologized to investors for losing their money and pledged to “right the ship as quickly as possible.” Then he solicited more money from them, raising $1 billion for a new fund and promised to waive the fees.
But he keeps on losing money.
Bill Ackman's plan to save his biggest investment has already been shot down (Business Insider)
Hedge fund billionaire Bill Ackman's plans for Valeant Pharmaceuticals seem to be at odds with those of the company's CEO, Mike Pearson.
Female traders may be the key to heading off stock market crashes (Quartz)
While the scenes depicted in the film The Wolf of Wall Street might be extreme, they do reflect a truth: that the world of finance is overwhelmingly male. It is this male-dominant culture, fueled by testosterone, that has been blamed by regulators, academics, and the popular press for instability and crashes in the financial markets. And with reason.
US rig count falls to the lowest level on record (Business Insider)
The combined count of US oil and gas rigs is at the lowest level since at least 1949.
ETFs & Mutual Funds Growing Together (ETF)
Fidelity is well-known for its active mutual funds, but in the past 2 1/2 years, the firm has found significant success in the ETF space. Its lineup of sector funds launched in 2012 has amassed some $2.5 billion in assets, and its ETF platform boasts about $200 billion in assets under advisement.
Some bond funds bet on longer-lasting rally in energy debt (Business Insider)
Many bond investors who benefited from the recent rally in battered energy debt prices are maintaining or seeking to add to their holdings, viewing the rally as the start of a longer-lasting uptrend rather than a blip.
Fund managers including MacKay Shields, Thornburg Investment Management and BlueBay Asset Management said they had increased their positions or initiated new ones in recent months after energy bond prices cheapened in 2015. Most of these fund managers had less exposure to energy debt at the end of last year than the indexes they compare their funds against.
China’s trilemma—and a possible solution (Brookings)
China’s central banker, Zhou Xiaochuan of the People’s Bank of China (PBOC), and other top Chinese officials recently launched a communications offensive to persuade markets and foreign policymakers that no significant devaluation of the Chinese currency is planned. Is the no-devaluation strategy a good one for China? If it is, what does China need to do to make its exchange-rate commitments credible?
Mystery 'Dude' Rattles Turkish Stock Traders With Massive Bets (Bloomberg)
There’s a specter haunting stock traders in Istanbul that some are calling “the dude.”
Super Mario's Corporate Bond Adventure (Bloomberg Gadfly)
It was European Central Bank President Mario Draghi's most audacious — or most desperate — stimulus plan to date. Either way, he may come to regret at least one part of it.
STRATFOR founder George Friedman gave us some jarring predictions for the future (Business Insider)
George Friedman founded Strategic Forecasting in 1996. Stratfor's existence is based on the controversial but now influential premise that geopolitical events can be anticipated and even predicted in ways that can benefit private-sector actors.
If you only make one investment this year, buy a golden pig (Quartz)
In all seriousness, it’s been a tough backdrop for picking winners this year. But gold has been a big one. The outperformance of the metal is tied, in part, to the flood of cash out of China, some of which is finding its way into the barbarous relic. Meanwhile, hog prices are holding up amid rising demand for pork from consumers.
Why Investors In Alternatives Perform So Poorly (A Wealth of Common Sense)
There was a story in Bloomberg today about the University of California’s endowment fund and their latest moves to shake up the portfolio.
Death of a Shale Man: The Final Days of Aubrey McClendon (Bloomberg)
Aubrey McClendon awoke that Tuesday, as he had 10,000 times before, ready to work a deal.
McClendon, co-founder of Chesapeake Energy Corp., had ridden more wild ups and downs in America’s energy patch than just about anyone. But on March 1, as the world closed in on him, McClendon had something else on his mind. That morning he was e-mailing about a riverfront development in his hometown of Oklahoma City, the place where he’d gambled so much for so long.
Porsche is crushing it in sales and sports cars have nothing to do with it (Business Insider)
In 2015, Porsche had its best year in company history.
Company executives reported today that revenue and profits both surged 25% to $24 billion and $3.8 billion respectively.
This is where the collector car market is going, say the experts (Classic Driver)
Cooling off; letting off steam; levelling out; market correction – whatever your preferred term, since last September, it’s taken hold of the classic car market by all accounts. But what drove it, which areas of the market remain prosperous and, perhaps most importantly, what does the future hold?
$1 Billion Plot to Rob Fed Accounts Leads to Manila Casinos (Bloomberg)
Casinos, money laundering and a scheme to steal $1 billion from the Bangladeshi central bank.
SP 500 and NDX Futures Daily Charts – 'Reconsidering' the ECB's Recent Action (Jesse's Cafe Americain)
According to the official spin, traders 'reconsidered' what the ECB did this week, and what Draghi had subsequently said, and gleefully cast off all doubts and concerns about risks and started buying equities.
SunEdison Can't Avoid Itself (Bloomberg Gadfly)
It is perhaps beginning to dawn on SunEdison's shareholders that, despite having narrowly avoided a car crash, they're still driving a heap of junk (debt).
Politics
Republicans' New Target: The 'Pre-Convention' (Bloomberg View)
The Republican delegate tangle has people talking excitedly about a contested national convention this summer. Not so fast. Even if no candidate wins the necessary 1,237 delegates by the end of primaries and caucuses on June 7, the six weeks that follow provide another opportunity to settle the matter before the party gathers in Cleveland on July 18. I’ll call this period the “pre-convention.”
After the ‘Nice’ Debate: Trump's Shape-Shifting Power (The Atlantic)
"Little Marco"? That was last week. It's the nice Donald Trump now, from the candidate with a greater dramatic range than anyone else in the race.
Two points about the state of the race on the day after the “nice” debate in Miami. This was the one in which Donald Trump, nominee-presumptive, once again shook things up with a polite, no-name-calling presentation that once again left the other contenders disoriented about where and how to attack.
Government Can't Let Smartphones Be `Black Boxes,' Obama Says (Bloomberg Politics)
President Barack Obama said Friday that smartphones — like the iPhone the FBI is trying to force Apple Inc. to help it hack — can’t be allowed to be "black boxes," inaccessible to the government. The technology industry, he said, should work with the government instead of leaving the issue to Congress.
Technology
To Win The Future, China Wants Its Own DARPA (Popular Science)
America hated the idea of being in second place. The Soviet Union launched its Sputnik satellite into orbit in 1957. To catch up, in 1958 President Eisenhower created the Advanced Projects Research Agency, ARPA. (The D for Defense was tacked on in 1973). Since then, DARPA-funded research has been part of an unprecedented era of technological dominance, from stealth technology to the internet. Now, it seems, China wants to gain a similar technological edge. And to do that, the country is creating its own DARPA.
A Computer Wins at Go, and This Human Is Disappointed (Bloomberg View)
Put away your worries about how all the major presidential contenders have abandoned a bipartisan consensus on trade, or whether any serious financial instrument will ever again earn serious interest. In Seoul, a genuine tragedy for the human race is taking place.
AlphaGo is winning. The computer, developed by artificial intelligence researchers at Google, has won the first two games in its five-game match with Lee Se-dol, the world’s best player of the game Go. The chances of a comeback are tiny.
Health and Life Sciences
Genetic denialism is unhelpful – genes play a role in who we are (The Guardian)
Are we shaped more by our genes or our environment – the age-old question of nature and nurture? This is really a false dichotomy; few, if any, scientists working in the area of human behaviour would adhere to either an extreme nature or extreme nurture position. But what do we mean when we say that our behaviours are influenced by genetic factors? And how do we know?
Why We Struggle To Do Things That Are Good For Us (Forbes)
I spend a lot of time talking about wellness to lawyers and other professionals. I talk about the importance of self-care, including sufficient sleep, exercise, eating more fruits/vegetables, less sugar/salt, having strong and fulfilling connections with others, etc. These are not earth-shattering suggestions, and in fact, they are completely obvious. However, when I survey the room and ask, “Raise your hand if you’ve exercised three or more times in the past week,” only a small portion of hands are raised.
Here’s what actually gives you cancer (Business Insider)
There’s abundant advice out there on what you should or shouldn’t eat, drink, swallow, or stand next to, to avoid cancer.
But it’s often lacking in evidence and the jumble of messages can be confusing.
Rates of new dementia cases may be falling (Futurity)
Despite concerns about an explosion of dementia cases in an aging population over the next few decades, a recent study finds the rate of new dementia cases may be decreasing over time.
The study in the New England Journal of Medicine offers hope that some cases of dementia might be prevented or delayed.
Life on the Home Planet
Drone to police massive marine reserve (BBC)
An ocean-going drone will be helping to spot illegal fishing in the world's largest, continuous marine reserve.
The UK said it would establish the 834,000-sq-km (322,000-sq-mile) zone around the Pitcairn Islands in the Pacific in 2015.
