Morning Report – The Week Ahead 10/27/14

US stocks are lower as overseas weakness spills over. Stress tests for the European banks showed Italian banks with some weaknesses. Bonds and MBS are higher.

Pending Home Sales rose .3% in September, slightly below expectations. They are up 1% year-over-year. Pending Home sales rose in the Northeast and the South, while they fell in the West and Midwest.

We have the FOMC meeting this week, which will probably dominate trading in the bond markets. This one will not have any new economic projections, however. In spite of Bullard’s musings last week, the consensus is that QE ends at this meeting. I suspect all of the action will be in the minutes, which will be released at a later date, not the FOMC statement. Here is Goldman’s take on the meeting.

Interesting backstory to the big capitulation in the bond market last week. When yields crashed through 2%, dealers turned off their automated market-making systems and executed trades over the phone. They widened bid ask spreads and decreased the size of their markets. In other words, when the markets most needed liquidity, it evaporated, making the move more pronounced.

Someone is betting on Detroit – buying 6,000 foreclosures for $500 a pop. Would be interested to hear the business plan.

18 Responses

  1. The ultimate in a slow Monday–frist!

    I’ve been wondering about that investor in Detroit ever since John/banned/nedstark posted a link to that last week. It’s either going to be amazing or appalling, is my guess.

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  2. That new grant? I’m sitting in on the phone conference kickoff meeting, and this is the mission statement for one of the cores (not ours):

    Leverage the power of diversity to provide the nation with best practices to optimize student/trainee success in biomedical sciences, best mentoring practices, and novel institutional and faculty level strategies across a range of institutional settings to blend global and local findings that can be adaptable to a variety of settings

    Oh, no!!!

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    • Leverage the power of diversity…

      I can’t imagine what power “diversity” actually has to be leveraged, especially in the field of biomedical science. Perhaps similar to our logic-impaired Justice Sonia Sotomayor, they think that a “wise latina” scientist, with the “richness of her experience”, is more likely to discover a cure for cancer than a white male scientist who hasn’t had that experience?

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  3. So in short they are validating Scott’s critique?

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  4. I don’t see why you seem to object to increasing the training opportunities for minorities to become well trained and well prepared scientists. Nor why you seem to think that diversity is a bad thing.

    Different people bring different strengths and viewpoints to tackling problems–or doing research. Science will benefit by having a more diverse group of scientists. So, yes, it’s entirely possible that a wise latina, approaching a scientific problem from a different set of life experiences, will discover a cure that a white male scientist will not. I’ve been in too many rooms–in both the military and as a scientist–where the least likely person, the one who had a completely different background from the majority of the people there, solved a seemingly intractable problem. If you haven’t ever had that experience, I feel sorry for you.

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    • Mich:

      I don’t see why you seem to object to increasing the training opportunities for minorities to become well trained and well prepared scientists.

      Because I object to race discrimination. Whatever training opportunities that are made available should be made available regardless of race.

      Nor why you seem to think that diversity is a bad thing.

      I don’t think that racial diversity is a “bad” thing. But nor do I think it is something to be valued for its own sake, especially in a field like science. I already asked you why anyone should care about the racial makeup of those in the science field. You had no answer. I don’t care about it. You apparently do, but for no explainable reason.

      Different people bring different strengths and viewpoints to tackling problems–or doing research.

      Of course. But race is indicative of neither one’s strengths/weaknesses nor one’s viewpoints/life experiences. And I think it is quite an invidious stereotype to think otherwise.

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  5. “Michigoose, on October 27, 2014 at 5:41 pm said:

    I don’t see why you seem to object to increasing the training opportunities for minorities to become well trained and well prepared scientists. Nor why you seem to think that diversity is a bad thing.”

    Implicit in the premise of the outreach is that there is some sort of institutional failing that is the cause of the lack of minority scientists and that if the outreach/recruitment/mentoring processes are improved, then the scientific community’s demographics will naturally “look more like America” to use the standard phrasing.

    Based on past efforts to remedy such situations, the metric chosen for success tends to be racial/ethnic/gender makeup of the target group (here presumably scientists) and if that’s the case then there will be institutional pressure to achieve the targeted diversity makeup, even at the expense of candidate quality.

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    • jnc:

      Implicit in the premise of the outreach is that there is some sort of institutional failing that is the cause of the lack of minority scientists

      Yup. And I suspect that the only “evidence” of this presumed institutional failure is the very fact of the under-representation of certain demographics itself. That is why the only measure of success will be – can only be – the racial makeup of the target group.

      I’d also be willing to bet anything that as in most of these situations, there is in fact no real institutional failing, and that the under-representation is due entirely to external factors totally out of the control of the university or the NIH.

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    • jnc:

      …and if that’s the case then there will be institutional pressure to achieve the targeted diversity makeup, even at the expense of candidate quality.

      From the article I linked to the other day:

      UMBC will receive $18 million over five years to target students with interest in science, technology, engineering and math fields who are not as academically strong as traditional STEM majors and are thus less likely to retain interest.

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  6. And there we are–the pointless round-and-round that I predicted. Somewhat amusing that diversity is one of the things that can prevent groupthink, no?

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    • Mich:

      Somewhat amusing that diversity is one of the things that can prevent groupthink, no?

      If by “diversity” you mean racial diversity, then no it isn’t. Especially when it comes to things like science, it strikes me as a pretty pernicious notion to think that different races bring different thought processes to the field. Do you really think white scientists approach problems/questions in a certain way that black and Hispanic scientists don’t, and vice versa?

      BTW, the whole notion that racial diversity has some kind of intrinsic value and is therefore desireable for its own sake is a very good example of the kind of “groupthink” that is so common on campuses today. Diversity doesn’t seem to have done much to blunt that particular “groupthink”.

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  7. ” diversity is one of the things that can prevent groupthink, no?”

    I dont think so. i’d have thought the scientific process handles that.

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  8. “approaching a scientific problem from a different set of life experiences, will discover a cure that a white male scientist will not. I’ve been in too many rooms”

    why do you attribute that to their background?

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  9. “novahockey, on October 28, 2014 at 8:43 am said:

    ” diversity is one of the things that can prevent groupthink, no?”

    I dont think so. i’d have thought the scientific process handles that.”

    Correct. There’s no such thing as Caucasian math, or African-American physics, or Asian chemistry. That’s the great thing about science. It’s universal and empirical.

    I was withholding judgement due to lack of specific knowledge of the proposal, but based on your description of the conference call and the quoted mission statement, this grant appears to validate the caricature that’s often ascribed to these sorts of efforts.

    Ironically, one the things that might be worthwhile to study would be to challenge the premise that diversity does in fact produce better results. Diversity only has value to the extent it produces a better outcome. Having two different teams attack the same problem with one being more diverse than the other and measure the outcomes to see which produces better results (assume that an agreed metric for judging the results could be acknowledged) would be interesting.

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    • jnc:

      Having two different teams attack the same problem with one being more diverse than the other and measure the outcomes to see which produces better results (assume that an agreed metric for judging the results could be acknowledged) would be interesting.

      Agreed, that would be interesting.

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  10. regardless, congrats on the funding.
    if someone puts $ on the table, you take it.

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  11. Ditto. Blame the game, not the player.

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