Wednesday, June 30, 2010

The Advisor Weblog

The Advisor Weblog

Hourly perspective for US session

Posted: 30 Jun 2010 07:03 AM PDT

ADP brings back risk aversion

Posted: 30 Jun 2010 05:21 AM PDT

US Private survey informed a 13K  jobs increase for June, against 55K past May and 59K expectations, triggering a strong risk aversion rally across the board: dollar and yen are strongly up across the board as US stocks slum strongly.

Fundamental data

Posted: 30 Jun 2010 04:22 AM PDT

A bit more serious about market: We have ADP today in the US. Past month NFP where quite disappointing, and market is expecting the same for this June readings to be publish next Friday, and be sure, ADP will do it’s job triggering rallies today, so here is the link for the calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

I wil prepare tomorrow a more complete overview for the Payrolls, with more accurate price and levels.

Starting the day

Posted: 30 Jun 2010 04:18 AM PDT

Hi everyone, and welcome to this blog! I’m beyond happiness today, and honestly, despite awake form 5 am, unable to read what had been happening in the markets, as i spend the last 3 hours saying tks! to hundreds of FRIENDS around the world, that are wishing me a great birthday.. I made 41 today! So many things lived in these years I need to write at least 3 big books to just be starting. Real things in life are priceless: keep that in mind ALWAYS! We can live without money.. I did.. we can’t live without love: family, friends, someone to be there for us all the time.

Anyway!!! i can’t help it… i have some ideas for our erratic friend EUR/USD and it’s mood changes ;) here is the link. Enjoy! be sure I will.

http://www.fxstreet.com/technical/forex-strategy/the-best-pair-to-trade-now/2010-06-30.html
Posted by at 5:34 PM 0 comments

Economist Notes Economic Advice Not for Amateurs

Kartik Athreya writes that the masses should only trust PhD economists for their economic advice. As mathematics is the language of economics, and economists use a specific set of mathematical tools such as real analysis, method of moment estimators, and dynamic programming, these essential tools are clearly not understood by your average commentator, justifying this belief. Why listen to someone's opinion on the TARP if they don't know how to apply Blackwell's contraction mapping theorem? Insanity!

I agree these tools are essential, but I would add that they are not sufficient. So, readers should only trust PhD economists who understand these tools, and also the context in which they are applied. Having a couple business cycles worth of experience actually presenting micro and macro forecasts to CEOs and other key decision-makers, or running a portfolio that is marked to market, as also essential. As economists are primarily experts in models, applied to cherry-picked datasets that present cute results that showcase some novel cleverness, they are ignorant of the their ignorance. Their models are like the electric car, always just around the corner to viability. With hindsight, predicting business cycles--anything really--is very simple. You need someone who has been doing it in real time, with real feedback, giving you advice.

I therefore feel obligated to suggest that Obama internet monitor Cass Sunstein appoint me--and Falkenblog readers--gatekeeper of all economic opinion. Arguments my Star Chamber find invalid will be degoogled via an innovative JavaScript that will be mandated on all websites. Any page containing the keyword "cost" must have they keyword "benefit" on the same page, and vice versa. Any mention of effects must have heteroskedasticity consistent standard errors, even if the said effect is qualitative (further, one must spell that with a "k", not a "c"). Presuming market oriented solutions assume perfect competition or perfect foresight, is no longer cromulent.

But that just targets the non-PhDs. As to mere PhD economists, mentions of multiplier effects, increasing returns to scale, or default choices on IRA withholdings are also uncromulent. They must also remind people that "chief economist" is a PR position with no influence within their own organization, and their mothers admit they are doctors but "not the kind that will do you any good". Macro economists must use the term TNSTAAFL at least once but never IMCO.
Posted by at 1:28 PM 0 comments

Tuesday, June 29, 2010

The Advisor Weblog

The Advisor Weblog

EUR/USD Technical points

Posted: 29 Jun 2010 03:58 AM PDT

Majors’ sentiment for today

Posted: 29 Jun 2010 03:23 AM PDT

Here is the majors’ sentiment for today:

Eur/Usd: Bearish

Gbp/Usd: Bullish

Usd/Chf: Bearish

Usd/Jpy: Bearish

Eur/Gbp: Bearish

Eur/Jpy: Bearish

Gbp/Jpy: Bearish

Starting the day! (and an interesing one)

Posted: 29 Jun 2010 03:20 AM PDT

Hi everyone, and welcome! Well, seems after all, we are not so confident and optimistic! All the dollar down triggered a couple of weeks ago by China´s pledged to leave yuan float more freely, sunk during past Asian session when worries concerning a slowdown in Chinese economy triggered the biggest sell-off in Chinse stocks in more than a month. The slump in Asian stocks was followed by European ones and US futures, we are all risk averted today, let’s go for dollar and yen!

Jokes a part, what we have been discussing about market forces and currencies strength these days, remains the same: Pound and Swiss Franc have been barely unchanged, and as much, lost some pips in correction move; Aud, sensitive to risk, has lost enough to test the 38.2% retracement of the last daily fall, from 0.9380 to 0.8060: watch for current 0.8550/70 area there, remains the key. Poor Euro suffered the most, capped rightnow under 1.2200, while yen strength against greenback is running out of gas under 89.00 (However, US session could bring a refill, not now ) .

Anyway! here is the link for today’s calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great day!
Posted by at 6:18 PM 0 comments

Why Go to College?

The more I think about college, the less important it seems. I did take a lot of various intro classes, and engaged in standard late-night discussions that are supposedly the essence of a modern liberal education, but really most of my learning happened outside my college experience. That is, I learned most of my math, statistics, history and computer knowledge before or after college, and interpersonal skills outside of the structured social functions of my fraternity (AEPi--Sigma Chapter). Sure, I picked up some things in college, but think about it--it was probably the time in my life when I had the most leisure time, because I wasn't learning as much as other periods in my life.

Now that college can easily cost $40k/year, it's reasonable to really look at the benefits more skeptically, as no one presumes that merely being a college grad entitles one to success.

I suggest you go to Academic Earth and see some of their courses. I think what can be taught--physics, math, etc--is taught well, but hardly worth $40k/year. These subjects are straitforward enough to allow a cheaper option that gives you the same result. And for the things that really can't be taught--who knows the right answer?--such as history, political science, and philosophy, it seems like top shelf professors are caricatures of leftist-PC propoganda.

Listening to Yale historians talk about the Civil War and Reconstruction or European History or UCLA professor talk about African American studies, you would get the impression that human civilization has been a sequence of disasters, one horrible injustice following another.

The Kling and Schultz book From Poverty to Prosperity, is much needed here. If a Martian looked at the change in society from 1500 to 2000, I think the growth in wealth, liberty, and art, would be the singular effect. For a young person at a top school today, you will have to learn that on your own time, or in an economic history course (many colleges don't have these, unfortunately). Rather, like the Marxist critique of capitalism, you will learn about all the injustice and inefficiency, and then naively assume that some utopian alternative is eminently feasible if we could only get the cabal of oppressors to stop manipulating the system.
Posted by at 12:38 PM 0 comments

Is Peer Review Sufficient or Necessary?

George Monbiot, the British climate-change alarmist, once wrote of a skeptic: ‘I accepted and floored him with a simple question: Has he published his analysis in a peer-reviewed journal?’, as if this were a truth-seeking silver bullet.

Is peer review necessary for one to have an opinion on something important like tax cuts, climate change, the war in Iraq, etc? The book The Hockey Stick Illusion highlighted that Einstein's paper on special relativity, and Watson and Crick's paper on DNA, were not 'peer reviewed', but somehow managed to be apex of scientific insight. So, peer review is not a necessary condition to presenting a new, true, and important idea.

The peer-reviewed journal process is a good thing, but it's still merely a means to an end: highlighting the good ideas, argument, and data. There's no royal road to this end. I review a couple papers a year for second-tier journals, and often I get to read the other referees comments in the second round, and usually find the other reviewer to be an distracted person who meticulously checks some things (grammar, math, the data, the big picture), but then ignores other dimensions. This is only natural, because often the papers are complicated, and he (or she) is counting on the other reviewer. But, what if I didn't check his empirical results with data I have unique access to (say, on corporate defaults)? Would anyone know? If you know what buttons to push, especially by anticipating the kinds of people who will referee your paper, you can game the system to a large degree.

Peer reviewed articles have been found with fraud (Hwang Woo-Suk and stem cells), errors, but most often, irrelevance. The latter point is especially important, because like grade inflation, as professors need X peer reviewed papers for tenure, there are ever more journals being created to satisfy this criteria. Alas, Sturgeon's law ('90% of everything is crap') holds, and so it becomes harder and harder to find the truth in a sea of irrelevant papers.

In Karl Popper's the Open Society and Its Enemies he wrote that 'Institutions are like fortresses. They must be well designed and manned.' Unfortunately, there are always too few good people to go around. The peer review process is a good thing, but it is still a flawed process, rewarding ritual over substance by the way certain things are treated non-skeptically if you use the rhetoric popular amongst the journal gatekeepers (eg, applying GMM to an equation, or Sokal's hilarious post-modern bunkum).

As Alexander Cockburn notes, 'many cite peer-reviewed science because they're afraid to have the intellectual argument.' Just about any hypothesis has some esteemed person and publication supporting it. If you then go to the 'majority of experts' route, you need a strange faith in the majority opinion (remember, before 2007, most regulators, bankers, investors, and academics believed that lower underwriting standards such as no income verification for home ownership were innocuous if not morally righteous).
Posted by at 5:50 AM 0 comments

Monday, June 28, 2010

The Advisor Weblog

The Advisor Weblog

Risk aversion on

Posted: 28 Jun 2010 06:52 AM PDT

Stocks are losing ground quickly and so are US treasuries, as risk aversion is getting back into trading desks. USD/JPY testing 89.00, seems ready to extend the rally towards May lows, while only Pound and Swiss Franc hold the positive tone against dollar, as mentioned earlier.

Hourly perspective for US session

Posted: 28 Jun 2010 06:42 AM PDT

Best pair to trade now:USD/CHF

Posted: 28 Jun 2010 04:48 AM PDT

Majors’ sentiment for today

Posted: 28 Jun 2010 04:28 AM PDT

Here is the majors’ sentiment for today:

Eur/Usd: Slightly BullishGbp/Usd: Bullish

Usd/Chf: Bearish

Usd/Jpy: Neutral

Eur/Gbp: Bearish

Eur/Jpy: Neutral

Gbp/Jpy: Slightly Bullish

Starting the day

Posted: 28 Jun 2010 04:26 AM PDT

Hi everyone, and welcome back. Lazy Monday as usual, market moves slow, but following past day’s tone: Swiss Franc, and Pound hold their strength, being the strongest currencies across the board, followed by aussie. However and despite weak at the moment, Euro holds a slightly bullish tone as I do believe we are close to see some attempt to at least test again the 1.2460 highs printed this June. USD/JPY remains unchanged, holding around 89.20/40 area despite US treasuries are positive: if Treasuries keep winning during the upcoming US session, there is a good chance to see some bullish strength in there, still not clear; anyway, here is he link for today’s calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great day!

 
Posted by at 6:33 PM 0 comments
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