Central Perk

vineri, 8 ianuarie 2016

Seth's Blog : How to teach science

How to teach science

Start with the method. Unlike just about everything else we teach, science is not based on human culture or history. If one wants to study literature or geography or the Kings and Queens of England, it begins with knowing all that came before, the work, the names, the lists, the battles. Science, on the other hand, is above culture. Gravity would have existed even if Isaac Newton hadn't invented it. After two weeks of science class, students should know how to think like a scientist.
Science makes sense, it's not magic. One of the challenges of teaching science in high school is that there seems to be so much to cover, it's tempting to cram all the formulas, names and theories in front of students. Just as there's no room to argue about when they fought the War of 1812, we often present science as a bag of magical facts, not the result of a method, a method students can implement.
Then the vocabulary. Not first, not second, but third. Vocabulary is where science students tune out. When a word doesn't mean anything, when it's a random placeholder, the easiest thing to do is fail to understand it, forever. And then there's no recovery. A strong vocabulary gives students the foundation to move forward, a weak one is the end, forever.
Metaphors are how we understand. Most of science, even physics after a few months, is about the invisible, the tiny, the very large, the things under the skin. The more we give students metaphors to hook these concepts into a world that's understood, the better.

Here are some statements worth avoiding:

Memorize this, it will be on the test.

Don't worry about it, just be able to answer the question.

You understood the concept, but were wrong by a decimal point. Zero credit.

Do the lab, even if it doesn't make sense.

In my (limited) experience, just about everything we do to teach science is diametrically the opposite of the points listed above.

If it's worth memorizing, it's worth even more to understand it.

PS this works with anything scientific, not just school science.

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Seth's Blog : Where does leadership come from?

Where does leadership come from?

Leadership is a choice. This is apparently controversial, but more than any other element I can track, leadership occurs when someone decides it's important that they lead.

The challenge, then, is in making the choice to lead.

I'd like to invite you to a new real-time online workshop on leadership. The goal of this group sprint is to create an interactive, real-time environment where you can safely explore what the leadership choice is capable of accomplishing, what it means, and how to get there.

You can find all the details here.

The workshop takes three hours, and my hope is that with your contribution (of time, content and energy), it will become an important part of the + Acumen series of courses. We're doing this as a fundraiser, hoping it will raise enough to allow Acumen to double the reach of their already essential online workshops and courses. Tickets are limited, and sign ups end next Friday.

I'll be in the Slack room for this launch session, and I hope to see you there.

{PS Sunday is the deadline for altMBA4 early-decision applications. The final deadline is next week.}

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Mish's Global Economic Trend Analysis

Chinese Markets Halted in 14 Minutes 17 Seconds, Equities Plunge Another 7.32%
Reader Asks About "Limited Supply of Homes"; Home Hunting in California
Another 2% Yuan Devaluation Coming Up? What Are the Risks? Explaining Chinese Capital Flight
Factory Orders Decline Again, Previous Month Revised Lower
ISM a Leading Indicator of Jobs? Why 2016 Will Shock to the Downside!

Chinese Markets Halted in 14 Minutes 17 Seconds, Equities Plunge Another 7.32%

Posted: 06 Jan 2016 10:09 PM PST

Sea of Red in Asia

There's another bloodbath in Asian equities his morning, the second in a week.

click on chart for sharper image

Chinese Markets Halted in 14 Minutes 17 Seconds

Chinese equities are down another 7.32% and the exchanges were halted in a record 14 minutes, 17 seconds.

The Wall Street Journal comments on China's Shocking Stock Halt.

A plunge in China stocks on Thursday led to their second trading halt this week and the shortest trading day in the market's 25-year history. The duration of trading that occurred in Chinese markets today: 14 minutes 17 seconds.

The Shanghai and Shenzhen stock markets were shuttered as "circuit breakers" installed Monday were triggered for the second time this week. The mechanism halts trading for 15 minutes if the CSI 300 index moves 5% and ends trading for the day if it moves 7%.

The Shanghai composite's this week: -11.96%. With today's performance, this week's decline marks the worst start to a year in Chinese trading history. The Shanghai Composite is on track for its worst week since July.

With today's performance, this week's decline marks the worst start to a year in Chinese trading history. The Shanghai Composite is on track for its worst week since July.

$SSEC - Shanghai Composite

When central banks blow bubbles that is what eventually happens.

Mike "Mish" Shedlock

Reader Asks About "Limited Supply of Homes"; Home Hunting in California

Posted: 06 Jan 2016 06:29 PM PST

Reader Brendan from California has some questions about housing. He writes ...

Hello Mish

I have messaged several Certified Financial Advisors and housing experts about the pending housing outlook for 2016 and 2017. Many suggest housing is related to oil and the stock market. Others say employment outlook and QE play a role.

According the NAR, "there is a limited supply of homes" thus the demand will continue.

What do you think?

We are saving to buy a home, but continue to get priced out of the market. I am doing everything possible to make a good family decision.

Thanks
Brendan

Don't Rush!

Hello Brendon. First off I commend you for seeking multiple opinions and not rushing into anything.

That said, please recall the alleged shortage of homes in 2005 and 2006. There was no shortage was there?

Rather, there was an increasing number of people willing to pay any price to get in.

The same is true today. The big difference today vs. the mid 2000s is that local variations are more widespread.

Realistically, there is never a limited supply of homes, but rather a limited supply of homes at prices people are willing to pay.

In California, especially around San Francisco and Silicon Valley, people once again are in a mad scramble to get in at any price.

This just cannot last. So it won't.

Hunting Homes in Silicon Valley

The Washington Post reports on What it's like to house-hunt in Silicon Valley, the nation's priciest market.

It's Sunday, which means house-hunting for Barry and Katie Templin. They have been on the prowl for months and saving for years, looking for a place with reasonable commutes to their technology jobs and good public schools for their two young children. They hope that is not too much to ask, even in Silicon Valley, the nation's most expensive housing market.

They pull their decade-old SUV up to a house that needs to be torn down yet is offered at $1.5 million. "Home has original GE metal kitchen cabinets," the listing brags. They walk up to find the house unlocked and empty. Black mold crawls over the walls. The ceiling is caving in. The wood floors groan as they pass through.

"It's like going into a haunted house," Barry Templin says.

"I can't believe this is 1.5," Katie Templin says.

"It's because it's Los Gatos," explains agent Laura DeFilippo of Alain Pinel Realtors.

Pure Madness

The words that best describe asking $1.5 million for a home with black mold, a ceiling caving in, and original GE metal cabinets are as follows: Pure madness.

If I had that piece of property I would want to get rid of it. When the cycle turns, and it will the seller will be lucky to get one third of that asking price.

That is the dilemma. And that is why Brendon's request for "housing outlook for 2016 and 2017" is far too short.

I advised many to buy in 2009-2011 after pointing out the risks. I cannot do the same today, except in places where valuations are not absurd.

Ramsey Su on Real Estate

I know Ramsey Su as a common-sense real estate expert from 2001-2003 when he posted on a Silicon Investor message board I hosted. He now posts on the Acting Man Blog.

Those wishing to buy a house as well as those interested in real estate in general would be advised to peruse the Ramsey Su Archives on Acting Man.

Specifically, I recommend his most recent post, Fed Action and the Real Estate Market.

Su discusses among other things the "Central Planning Dilemma". He also notes "There are so many things that are fundamentally wrong with the real estate market that I will leave most of them to future rants. For now, I would like to point out that the market suffers from an acute supply and demand imbalance, both geographically and in terms of its mix. All the demand in Silicon Valley is not going to help Texas, which may start to reflect the stress of the oil industry."

Su concludes with "The market cannot handle a 5% or higher mortgage rate. Refinancing still accounts for over 60% of mortgage applications. At 5% or above, the only refinancing business left would be the government's HARP subsidies. As for purchases, all stressed out first time buyers with high debt to income ratios and low down payments will be wiped out. Without the entry level, the trade up level is gone as well."

I conclude with, if you believe a home you want to buy may not be affordable, then undoubtedly it isn't. You could get lucky, but it's far more likely you would become another trapped victim. Caution is in order.

Mike "Mish" Shedlock

Another 2% Yuan Devaluation Coming Up? What Are the Risks? Explaining Chinese Capital Flight

Posted: 06 Jan 2016 12:54 PM PST

Another Yuan Devaluation Coming Up?

Currency trends suggest another yuan devaluation is coming up. Specifically, the gap between the mainland China yuan (renminbi) to the US dollar, vs. the offshore floating rate of the yuan to the US dollar is now at a record high.

The reason there are two rates is China has tight controls on the range the yuan trades in China, but the yuan floats outside China.

In contrast to previous years where traders bet the value of the yuan would rise vs. the US dollar, traders are increasingly betting China will devalue.

Explaining Chinese Capital Flight

If China had no capital controls, the onshore and offshore rates would have to be identical otherwise there would be an instant guaranteed free money arbitrage opportunity in virtually unlimited size were China to maintain a peg the market did not agree with.

Here are a couple of charts that show what I mean.

Onshore Yuan

Offshore Yuan

Onshore / Offshore Rate Differentials

The onshore rate is 6.5567 per US dollar.
The offshore rate is 6.6993 per US dollar.

Another 2% Devaluation?

The onshore yuan is weaker than offshore by 0.1426. That's a bit over 2%.

In the absence of capital controls one could make an instantaneous 2% on an unlimited amount of money. That such spreads exist shows that capital controls work, for the most part, at least for now.

However, capital controls are not perfect. Those able to skirt capital controls do so. One possible method of free arbitrage would be export/import trades that do not really take place, or simply padded higher.

Fraud of such nature cannot be unlimited. $1 trillion in sudden exports or imports is going to get caught, but smaller amounts can be hidden.

In addition, those sitting with a lot of money in a depreciating currency don't exactly like that outcome. Thus capital flight pressure is intense for two reasons.

One way or another (slowly over time, or by another 2% devaluation), the yuan appears destined to sink. When will it stop?

The Risk

The risk, as always is that things get out of hand. Repetitive devaluations could trigger a rash of competitive currency devaluations with Japan or the US entering the picture.

Meanwhile, devaluations will certainly trigger the ire of US Congress that views the trade imbalance with China as proof the yuan is undervalued. Donald Trump has stirred up that exact sentiment,

For further discussion, please see:

Currency Crisis Coming Up

When does pressure on the yuan cease? The answer may very well be "as soon as China floats the yuan and takes off capital controls".

I expect a full-blown currency crisis before that day.

On the other hand, if China floated the yuan right now, it could crash now. Take your currency crisis poison one way or another.

Mike "Mish" Shedlock

Factory Orders Decline Again, Previous Month Revised Lower

Posted: 06 Jan 2016 11:10 AM PST

Factory orders rose last month for a change, but nearly all of it was due to transportation, especially aircraft orders that have a very long lead time.

This month we see a 0.2% decline that's in line with the Econoday Consensus Estimate.

Flat is a good description of the nation's factory sector as factory orders slipped 0.2 percent in November, making October's revised 1.3 percent gain look like a rare outlier. Durable goods orders were unchanged in the month while orders for non-durable goods fell 0.4 percent on price weakness for petroleum and coal.

Capital goods data, unfortunately, are mostly weak including a 0.3 percent decline for core orders. Shipments of core capital goods fell 0.6 percent in November and follow October's 1.0 percent decline in readings that will pull down the business investment component of the fourth-quarter GDP report.

Outside of orders, total shipments edged 0.2 percent higher to end a string of declines that go all the way back to July. Inventories also offer good news, falling 0.3 percent and bringing down the inventory-to-shipment ratio to a less heavy 1.35 vs October's 1.36. Unfilled orders are another positive, rising 0.2 percent following a 0.3 percent gain in October.

The factory sector is not exactly robust, the result of weak demand for U.S. exports and also weakness in the domestic energy sector reflected in this report by a 13.6 percent monthly plunge in orders for mining & oil field machinery. But the nation's economy is not narrowly focused on the factory sector, evidenced by healthy readings in today's ISM non-manufacturing report.

New Orders vs. Shipments

Bloomberg commented "But the nation's economy is not narrowly focused on the factory sector, evidenced by healthy readings in today's ISM non-manufacturing report."

Well, the nation's economy is certainly not centered on consumer spending as most think. If it was, one could spend themselves to Nirvana.

Moreover, manufacturing's importance is misunderstood nearly across the board. I posted a chart showing the relationship of manufacturing to nonfarm payrolls.

Upturns and Downturns in Manufacturing ISM vs. Nonfarm Payrolls

The above chart plots percent change in seasonally-adjusted nonfarm payrolls vs. the seasonally adjusted ISM manufacturing index.

Looking at about 30 turning points since 1965, I can only find one key top or bottom where manufacturing ISM did not lead jobs.

For more details, please see ISM a Leading Indicator of Jobs? Why 2016 Will Shock to the Downside!

Mike "Mish" Shedlock

ISM a Leading Indicator of Jobs? Why 2016 Will Shock to the Downside!

Posted: 05 Jan 2016 11:19 PM PST

ISM a Leading Indicator of Jobs?

I expect monthly jobs reports in 2016 will shock to the downside. Before I list all the reasons, here's an interesting chart that suggests manufacturing ISM is a leading indicator of jobs.

Upturns and Downturns in ISM vs. Nonfarm Payrolls

The above chart plots percent change in seasonally-adjusted nonfarm payrolls vs. the seasonally adjusted ISM manufacturing index.

Looking at about 30 turning points since 1965, I can only find one key top or bottom where ISM did not lead jobs. Unless manufacturing turns here, 2016 looks to be a rough year for jobs, especially vs. expectations.

Why 2016 Will Shock to the Downside!

Manufacturing is not the only reason to think jobs will sour in 2016. Here's a litany of reasons:

Manufacturing has been in an outright recession for nearly a year. Contrary to popular belief, production, not spending is the driver for growth.
Housing is slowing. This was evident even before the construction revisions. Home prices are not affordable.
Higher minimum wages that take effect in January in many states will act as a huge drag on hiring.
Many big box retailers including Walmart and Macy's are struggling. Struggling retailers do not build as many stores as they would otherwise.
Mall vacancies are rising.
Corporate profits are under pressure.
The strong dollar continues to hurt exports.
Inventories have risen far more than sales. This will impact future hiring.
Auto sales, a key component of spending took a hit in December. The auto party, fueled in part by subprime loans cannot last forever.
Canada, the US's largest trading partner is in recession.
Migration issues are straining European relationships. Spillover will affect global trade including trade with the US.
Interest rates are rising even as GDP weakens. The treasury yield curve and Fed fund futures signal caution.
Judging from the Chicago PMI, the service economy is weakening dramatically.
Rent prices and the employee cost of Obamacare have outstripped growth in wages.

Mike "Mish" Shedlock

Damn Cool Pics

Two Teams Tried To Create The Largest Bonfire In The Netherlands On New Year's Eve
Teen Goes Out Of His Way To Troll A Horny Guy
Restaurant Manager Puts Obnoxious Customer In Her Place On Facebook

Two Teams Tried To Create The Largest Bonfire In The Netherlands On New Year's Eve

Posted: 06 Jan 2016 02:34 PM PST

Two Dutch teams from the districts of Scheveningen, in Noorderstrand, and Duindorp, in Zuiderstrand, tried to outdo each other on New Year's Eve by lighting the biggest bonfire the Netherlands has ever seen. The two different districts built massive piles of wood but It was Duindorp's year this time around as they had the bigger bonfire.

Teen Goes Out Of His Way To Troll A Horny Guy

Posted: 06 Jan 2016 01:41 PM PST

This teen took trolling to the extreme when he put on this outfit.

Restaurant Manager Puts Obnoxious Customer In Her Place On Facebook

Posted: 06 Jan 2016 01:37 PM PST

This woman didn't have a god New Year's Eve and she just couldn't let it go. She had to make sure that her obnoxious voice was heard and in the end she got completely owned.